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GM's plan only partly solves gap between capacity and sedan demand

Paul Lienert, Reuters  /  November 28, 2018

DETROIT -- General Motors' monumental announcement on Monday that it plans to close up to five assembly plants in North America and slash its workforce will only partially close the gap between capacity and demand for the automaker's sedans, according to a Reuters analysis of industry production and capacity data.

Sales of traditional cars in North America have been declining for the past six years and are still withering. After GM ends production next year at factories in Michigan, Ohio and Ontario, it will still have four U.S. car plants, all operating at less than half of rated capacity, according to figures supplied by LMC Automotive.

In comparison, rivals Ford and Fiat Chrysler Automobiles (FCA) will have one car plant each in North America after 2019.

The Detroit Three are facing rapidly dwindling demand for traditional passenger cars from U.S. consumers, many of whom have shifted to crossovers, pickups and SUVs. Cars accounted for 48 percent of retail light-vehicle sales in the United States in 2014, according to market researchers at J.D. Power and Associates. This year, sedans will account for less than a third of light-vehicle sales.

That shift in turn has left most North American car plants operating far below their rated capacities, while many light-truck plants are running on overtime.

The collapse in car demand is a challenge for nearly all automakers in the United States, including Japan's Toyota and Honda, which have the top-selling models in the compact and midsize car segments. Toyota executives said last month they are evaluating the company's U.S. model lineup. But Toyota also plans to build compact Corolla sedans at a new $1.6 billion factory it is building in Alabama with partner Mazda.

The obstacles facing GM in its plans to close more factories became apparent on Tuesday as President Trump threatened to block payment of government electric vehicle subsidies to GM. While it is not certain that Trump unilaterally has the power to do that, he made it clear he intends to use his office to pressure the company to keep open a small car plant in Ohio that GM says will stop building vehicles in March.

Asked whether GM's plans to close factories and cut jobs might not solve the demand problem for its sedans, GM spokeswoman Kimberly Carpenter said on Tuesday: "We continuously look at our operations for opportunities to improve our efficiency and capacity utilization. We believe the actions announced yesterday move us in the right direction and we will continue to monitor the market and consumer trends and adjust accordingly."

Shares of the No. 1 U.S. automaker closed 2.5 percent lower at $36.69 on Tuesday, after rising nearly 5 percent the previous day.

Abandonment issues

GM executives have said they do not intend to abandon cars to the extent that Ford and FCA have. GM car plants that will remain open include Fairfax, Kan., which builds the Chevrolet Malibu and Cadillac XT4 compact crossover. But that plant is operating at 48 percent of capacity, well below the 80 percent that GM CEO Mary Barra is targeting as the average for North America.

A GM plant in Lansing, Mich., that builds the Cadillac ATS and CTS and Chevrolet Camaro is running at just 33 percent capacity, while the GM Orion Township, Mich., facility that builds the Chevrolet Bolt electric car and the Chevrolet Sonic subcompact runs at 34 percent capacity. A Bowling Green, Ky., plant that builds the Chevrolet Corvette works at just 27 percent of its potential output, according to LMC data.

"Until GM gets more flexibility in its platforms, it will continue to have to play whack-a-mole with its plants as the market transitions — and it will happen again," said LMC analyst Bill Rinna.

In all, the four GM car plants that will remain open have a combined capacity of more than 800,000 vehicles a year, but are expected to produce only 360,000 cars this year, according to LMC.

Industry analysts have said the general break-even point for running an assembly plant profitably is around 80 percent. Barra said on Monday GM's North American plants are running at 70 percent capacity — including light-truck plants that are working overtime.

Ford plans to end production in March of the Taurus at its Chicago plant, which also builds the Explorer and Aviator crossovers. That will leave the automaker with only one U.S. car plant, in Flat Rock, Michigan, which currently builds the Ford Mustang and the Lincoln Continental. The Mustang is due for a mild redesign around 2021, but the Continental is scheduled to be phased out then, according to two sources familiar with the company's plans. Flat Rock is running at just 49 percent of capacity, but Ford has said it plans to add new products to the plant, including its first automated vehicle, in 2021.

Fiat Chrysler still builds the full-size Chrysler 300 and Dodge Charger and Challenger at its Brampton, Ontario, plant. Demand for those large cars remains robust, and the plant is running at nearly 80 percent capacity.

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GM's Ammann vacates president role to lead AV unit

Michael Wayland, Automotive News  /  November 29, 2018

General Motors President Dan Ammann will step down from his role to become CEO of the automaker's Cruise autonomous vehicle unit.

The move -- effective Jan. 1 -- emphasizes the importance of the operations to the future of GM, which plans to launch a public self-driving ride-hailing fleet in 2019. It also places Ammann, a former Wall Street banker who joined GM as its treasurer in 2010, to potentially lead a spin-off and initial public offering of Cruise, which analysts have speculated is eventually coming.

A successor for Ammann, 46, will not be named. GM CEO Mary Barra, 56, will absorb his responsibilities over global regions and GM Financial, while CFO Dhivya Suryadevara, 39, takes responsibility of the automaker's corporate development, the automaker said today.

Cruise's current CEO and co-founder, Kyle Vogt, will become president and chief technology officer of the operations.

Ammann and Vogt will "set the strategic direction" for Cruise. Ammann on Thursday described it as a "partnership" with Vogt leading technical side of the business and Ammann focusing on "commercialization and other scaling from a corporate point of view."

Ammann, who will be based in San Francisco, declined to comment on the possibility of a spinoff or IPO.

"All the energy right now is focused on getting to the point of initial commercial deployment," Ammann told Automotive News, later saying the company could be "open-minded to other opportunities down the road."

Bloomberg reported earlier this year that GM was talking with banks and internally about its eventual options for Cruise, including a public offering, spinoff or separate stock listing.

Ammann said he is "thrilled" to be dedicating 100 percent of his time and energy to Cruise, which is currently valued at $14.6 billion following recent investments.

“It’s our belief that this technology will only have the impact that we want it to have on the world if it’s deployed at massive scale,” Ammann said. “So, we need to be preparing for that as we continue the technology as we prepare initial commercialization.”

Spearheaded by Ammann, GM acquired San Francisco-based Cruise Automation in 2016. He has since overseen its expansion from 40 employees to more than 1,000 at the GM subsidiary.

“Dan’s talents, I think, would have been underutilized if he was the CEO when there was just 40 people at the company,” Vogt said on Thursday. “To me, it’s sort of the sweet spot where the skills that Dan has will really complement what we have on our leadership team today and take it to the next level. I think the timing is pretty good.”

Ammann relinquished other roles as president, including leading Cadillac and global portfolio planning, to GM product chief Mark Reuss in June.

The changes follow several major announcements in recent months about GM's autonomous work, including a $2.25 billion investment by the SoftBank Vision Fund of Japan and plans for Honda Motor Co. to invest $2.75 billion in the operations.

"These appointments further demonstrate our commitment to transforming mobility through the safe deployment of self-driving technology and move us closer to our vision for a future with zero crashes, zero emissions and zero congestion," Barra said in a Thursday statement. "As we move toward commercial deployment, adding Dan to the strong team led by Kyle is the next step."

The announcement also comes three days after Barra and Suryadevara announced a major restructuring of the company's North American production operations and plans to cut 15 percent of the automaker's salaried workforce, including 25 percent of its global executives. Those actions were in part driven by GM’s plans to devote more resources to emerging technologies such as self-driving and autonomous vehicles.

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The GM plant shutdowns have a lot to do with funding self-driving and autonomous vehicles. They think this is the future, I wonder if most of us want one?

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I'm a consumer. I have never demanded.....nor do I want.....self-driving and autonomous vehicles from the auto industry.

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And if self driving vehicles are the wave of the future held back only by old regulations, how come we're not seeing it on private industrial estates, etc.?

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I'm all for it. If I can catch a nap headed somewhere, so be it. 

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I used to like driving, but given the current state of drivers on the road today, self driving vehicles can't come soon enough. Especially when our gov's keep importing more people to our countries. I can't even count how many times a day I have to take the shoulder because these new breed can't stay on their side of the center line....on a clear sunny day even!!!!

i bet even the failure rate of them will be far less than the failures driving now, LOL.

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On 11/30/2018 at 8:25 AM, kscarbel2 said:

I'm a consumer. I have never demanded.....nor do I want.....self-driving and autonomous vehicles from the auto industry.

Amen!  On the Op-Ed page of today's WSJ is an article by Holman Jenkins .."Self-Driving Car Returns to Earth.  In summary, as I read it, he is saying the bubble and myth of "self driving" is about to burst.

 A key quote.."Lately with signals from its industry sources, the press has finally decided to acknowledge that the autonomous car isn't just around the corner.  It can't handle inclement weather.  It can't reliably tell a plastic bag blowing across the road from a child on a bicycle and won't be able to soon."

Best quote..."Axios, that breathless compendium, now admits after launching its own autonomous vehicle newsletter that true self-driving cars are still "10,20,50 years" away."

Unfortunately people like Hackett at Ford and Barra at GM are running like lemmings to the cliff because Silicon Valley says  we must have autonomous vehicles.

As I've said before, the only winners will be the lawyers.

Amazing isn't it when for years we have been reading in Car and Driver, Road and Track,  Autoweek etc, such phrases as..."The new XYZ represents the latest in driving dynamics that will make this car a best seller blah blah"

Suddenly, we don't want to drive-or so we are being told.

 

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2020 Chevy Silverado HD diverges from smaller sibling

Michael Wayland, Automotive News  /  December 4, 2018

General Motors is further differentiating the 2020 Chevrolet Silverado HD from its smaller sibling.

The redesigned HD pickup's grille features a flow-through "CHEVROLET" similar to some models of the Silverado 1500, but the HD's grille is much larger than the Silverado 1500's and is flanked by headlight stacks with a chrome bar separating a top light from two lower lights. It also has a large air intake above the grille and is noticeably larger than the Silverado 1500.

The only exterior piece the Silverado HD shares with its smaller sibling is the roof, according to GM.

Company officials said the greater differentiation resulted from feedback from owners, who said they wanted their HD models to stand out from the Silverado 1500 models.

"We set out to make a statement with the 2020 Silverado HD and wanted to visually capture the power and capability of the truck," said Brian Izard, Silverado HD lead exterior designer, in a statement. "The result is a truck that looks like a piece of heavy machinery with modern, chiseled finishes and customer-focused details."

The automaker released photos and some information about the Silverado HD Tuesday before its official debut in February.

The redesigned Silverado HD will be offered with a new gasoline engine with direct injection mated to a six-speed transmission, or the Duramax turbodiesel V-8, rated at 910 pound-feet of torque, with a new Allison 10-speed transmission.

The company said the Silverado HD will have "all-new customer-focused trailering technology" and "significant increases in towing and payload capabilities," but it did not release performance metrics.

The 2020 Silverado HD -- produced in Flint, Mich. -- is expected to go on sale in mid-2019. It will be the third new or redesigned Silverado in the last 18 months, following the redesigned 1500 and new medium-duty.

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2020 Silverado HD Equipped with Allison Transmission

Heavy Duty Trucking (HDT)  /  December 5, 2018

Chevrolet will offer a 10-speed, fully automatic Allison transmission in its 2020 Silverado 2500/3500 HD trucks. The 2020 Silverado HD will debut in February.

“We built the new 2020 Silverado HD with more differentiation than ever before, to meet the needs and priorities of our customers,” said Jaclyn McQuaid, chief engineer, Silverado HD. “By offering the new Allison 10-speed, tested and validated in partnership with Allison Transmission, each transmission will deliver the legendary quality and durability that customers have come to expect.

The Allison-branded automatic transmission, manufactured by General Motors, combines enhanced performance and fuel economy, greater operational flexibility, and improved driver comfort and control, with an industry-leading reputation for uptime and reliability, according to the companies. The Allison 10-speed transmission will be coupled with Chevrolet's Duramax diesel engine.

"We are pleased that General Motors continues to expand the range of Allison products available for their customers with the 2020 Silverado HD," said Randy Kirk, senior vice president of product engineering and program management for Allison Transmission. "Allison Transmission and GM have a long history of collaboration and innovation."

Recently, Allison began producing the 6-speed fully automatic transmission for Chevrolet’s Silverado 4500 HD, 5500 HD, and 6500 HD medium-duty trucks.

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The .."Allison branded transmission manufactured by General Motors...."???????????? So is this the 10speed developed jointly with Ford?. Except I guess the Allison name equates to ..what?  Bullet proof?

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Very nice... surprised he didn't say.."and to all you GMC dealers who are still pissed because your friends at Chevrolet are getting the new class 4, 5 and 6 trucks and you the former "truck people from General Motors" are not. I say..Get over it"

 

 

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37 minutes ago, Red Horse said:

The .."Allison branded transmission manufactured by General Motors...."???????????? So is this the 10speed developed jointly with Ford?. Except I guess the Allison name equates to ..what?  Bullet proof?

"tested and validated in partnership with Allison Transmission"

So deep that boots are required Bob.

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Well, if you want to get technical.....  The current Allison 1000 series transmission was developed by Allison when it was still owned by GM.  When GM spun off Allison, GM kept the 1000 series transmission, rights to the Allison name,  and the Baltimore plant it was produced in.  So, was the 1000 still really an Allison?  You decide.

This new heavy duty 10 speed is something of a mystery.  I do not believe it is the 10 speed light duty transmission that was co-developed by GM and Ford (and is now in some versions of the F-150).  Adding to the mystery is reports that Ford will also have an all new heavy duty 10 speed in the Super Duty next year replacing the current Torq-Shift 6.  That bit of news caught me by surprise, I thought the Torq-Shift 6 was a great transmission and has only been around 8 or so years.

Question:  Is GM's new 'Allison branded' 10 speed going to be related to Ford's new 10 speed? 

 

 

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Barra says GM has made tremendous investment. In Mexico for sure.......

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Some 2019 GM pickups will have lower mpg than outgoing models

Michael Wayland, Automotive News  /  December 7, 2018

The fuel economy on some redesigned Chevrolet Silverado and GMC Sierra models will be worse than the outgoing pickups they're replacing.

Ratings on fueleconomy.gov have 2019 models equipped with 4.3-liter V-6 and 5.3-liter V-8 engines getting up to 3 mpg combined less than comparable 2018 pickups. The engines are mated to a six-speed automatic transmission.

It's unusual for outgoing models with essentially carryover powertrains — aside from small changes such as tuning to engines and transmissions — to be rated higher than redesigned vehicles that are replacing them.

Monte Doran, a Chevrolet spokesman, attributed the difference in fuel economy to the redesigned trucks being more capable and larger than the outgoing models, which in turn increases aerodynamic drag.

"We increased towing capacity, payload, and it's a much larger bed and a much larger cab," he said.

While aerodynamic efficiency increased 7 percent and the automaker cut out hundreds of pounds on the redesigned Silverado, Chevrolet says the frontal area also increased — resulting in the same aerodynamic load. The Sierra is slightly more aerodynamic than the Silverado. However, it's still larger than the outgoing model.

Aside from differences in engineering and design, auto writer Bozi Tatarevic, who initially tweeted the differences, pointed out the rear axle gear ratios also are different between the model years.

GM was able to offset much of the aerodynamic drag for models with other engine options, which experienced small increases in fuel economy, with new technologies such as dynamic fuel management and higher-speed transmissions.

The 4.3-liter V-6 and 5.3-liter V-8 engines are standard or available on entry-level and lower-end trims on the pickups.

The 2019 two-wheel-drive models with the 4.3-liter V-6 engine are rated at 17 combined (16 city/21 highway). That's down 3 mpg compared with 2018 models at 20 combined (18 city/24 highway).

Redesigned four-wheel-drive models with the V-6 engine are rated at 17 combined (15 city/20 highway), down 2 mpg from the 2018 pickups that were rated at 19 combined (17 city/22 highway).

The 5.3-liter models with four-wheel-drive and two-wheel-drive also are rated 17 mpg combined. However, the highway fuel economy for four-wheel-drive models is 1 mpg less at 20 highway, and city is 15. That compares with 2018 four-wheel-drive models at 18 mpg combined (16 city/20 highway) and two-wheel-drive models at 19 mpg combined (16 city/23 highway).

The Chevrolet Trail Boss models, new lifted trims with four-wheel-drive and off-road equipment, with the engines are rated at 16 combined (14 city/18 highway).

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Chevrolet Camaro Chief Engineer Al Oppenheiser Reassigned to GM’s Electric Vehicle Group

Andrew Wendler, Car & Driver  /  December 7, 2018

After years on Camaro, Al Oppenheiser will jump-start efforts on the full range of future General Motors EVs.

Al Oppenheiser, chief engineer and spiritual leader of the Chevrolet Camaro program for more than a decade, is moving to General Motors' newly formed AV/EV organization to focus on zero-emission-vehicle development. Mark Dickens, current executive director of Performance Variants, Parts, Accessories, and Motorsports Engineering—not to mention card-carrying member of the Bonneville Salt Flats 200-MPH Club—will assume Oppenheiser's role as chief engineer of the Camaro program.

Credited with shepherding the fifth- and sixth-generation Camaro and performance variants such as the Z/28 and the ZL1 into existence, Oppenheiser developed a loyal team of colleagues within Chevrolet—not to mention the respect of the Camaro community and of Chevrolet performance fans as a whole. There is a contingent of late-model Camaro enthusiasts for whom Oppenheiser represents the human element behind the sheetmetal, tiny daylight openings and all. How they will react to his departure remains to be seen.

General Motors spokesman Michael Albano told C/D that, because electrification is playing a huge role at GM, the automaker is moving "some of our best talent" to work on current and upcoming projects. He acknowledged that this is a lateral move and not an elevation of position for Oppenheiser, who will remain a chief engineer. "We have launched the final variant of this generation of Camaro, so the time is right" for him to move, Albano added.

While Albano told us that Oppenheiser's appointment doesn’t necessarily indicate that GM will immediately begin working on a Camaro EV or a similar performance-focused EV, the company has not "ruled out in the future that we [could] have performance cars that are electrified." Oppenheiser's responsibility will reportedly be "broader than one specific vehicle" and he will be working on a variety of EVs with a range of different body styles.

In his new role, Oppenheiser will play a key role in GM’s future vision of zero-emission vehicles. Oppenheiser’s career at GM began in 1985, and he has been Camaro chief engineer since 2007, responsible for all variants of the fifth- and sixth-generation Camaro. He joined the Chevrolet performance-car team after spending four years as the director of concept and vehicle integration for the GM Performance Division. His ascension through the ranks is due in no small part to his reputation for always delivering and finding ways to work through the organization to bring projects to fruition. He certainly delivered a lighter and much better-driving Camaro in its latest, sixth generation. "Now he's moving to an area where we can’t afford not to deliver the right kind of vehicle to customers,” Albano said.

Albano said that Oppenheiser is excited and, although he may have some reservations, knows that Dickens is the right guy to take over for him. "I thought I'd die in this role, but I'm happy to be part of the future," Oppenheiser reportedly said.

The outgoing Camaro chief engineer will start in his new position in early January, in the same time frame with other global product-development staff changes, Albano told C/D.

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Elon Musk Says Tesla Might Be Interested in Buying GM Plants

Transport Topics  /  December 10, 2018

Elon Musk is sizing up General Motors' recently idled plants.

The tech billionaire said in an interview with CBS’ “60 Minutes” that it’s “possible that [Tesla] would be open” to taking over automakers’ old plants, including factories GM recently has slated for closure.

GM announced late November that it would idle assembly plants in Detroit-Hamtramck, Lordstown in Ohio and Oshawa in Ontario by the end of 2019.

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GM pressed by 2 Senators to build all EVs for U.S. stateside

David Shepardson, Reuters  /  December 11, 2018

WASHINGTON -- Two U.S. senators from Ohio on Tuesday asked General Motors CEO Mary Barra to commit to building all future electric vehicles for U.S. buyers at home and to provide more details of plans to cut back on car production in North America.

The letter from Republican Senator Rob Portman and Democrat Sherrod Brown demanding answers to questions by Dec. 21 is the latest effort by Congress and the White House to press GM into reversing its decision to halt production at four U.S. plants and cut thousands of jobs.

The senators also asked if GM will produce additional EVs or shift to building EV SUVs and crossovers.

The letter asks GM to disclose how many people at its suppliers in Ohio will lose their jobs if GM closes its Lordstown Assembly plant as well as how much it will cost to close the plant. GM plans to discontinue U.S. production of the Chevrolet Cruze, which is made in Lordstown.

GM is unlikely to build a new vehicle at Lordstown once it halts Cruze production in March, company officials say, and GM executives have told Congress it would take two years or longer to develop and prepare the plant to assemble a new vehicle.

Barra said last week she would keep an "open mind" about the plant's future. The final decision will be made during contract talks in 2019 with the United Auto Workers union, she added.

On Friday, four members of the U.S. House wrote President Donald Trump inviting him to join them in visits to the closing plants and urging him to intervene "in every manner possible to seek both short and long term remedies for these workers."

GM, which is holding a two-day board meeting this week, did not immediately comment on the letter. The company cut hundreds of contract product development jobs in Michigan last week as part of its plan to cut around 8,000 salaried positions in North America by early 2019.

GM said in October 2017 it would launch at least 20 new all-electric vehicles by 2023, but has not said where they will be produced. GM builds the EV Chevrolet Bolt at a plant in Michigan, but plans to end production next year of its plug-in hybrid Chevrolet Volt in Detroit.

GM builds the Buick Envision in China and exports it to the United States. The company asked the Trump administration in July to exempt the vehicle from a new 25 percent U.S. tariff.

The White House favors ending the $7,500 EV tax credit. GM and Tesla Inc have been lobbying Congress to extend the credit to cover additional vehicles.

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Chevrolet's 2020 mid-engine Corvette delayed

Jake Lingeman, Autoweek  /  December 13, 2018

The midengine 2020 C8 Chevrolet Corvette will not be shown at the 2019 Detroit auto show next month, according to GM Authority, which cited anonymous sources at Chevrolet, because of electrical problems. The car's launch could be delayed by up to six months, the website said.

GM Authority reports the C8’s electrical system can’t handle operating loads on the supercar, raising the prospect that next Corvette is a hybrid with a possible 48-volt primary electrical system.

Engineers need to revamp the electrical system, which could require an electric motor on the front axle, similar to the Acura NSX. GM Authority says the midengine Corvette is still expected to be introduced in 2020.

The Detroit News, citing a Chevrolet spokesperson, also reported the next-generation Corvette will not be introduced at the 2019 Detroit auto show.

Car and Driver has reported that a hybrid variant with a twin-turbo V-8 engine is planned for the Corvette C8 and could generate 1,000 hp with all-wheel drive.

The next-generation Corvette has been spotted undergoing tests at GM's Milford Proving Grounds in Michigan and at race tracks such as Wisconsin’s Elkhart Lake and Germany’s Nürburgring.

The car was spotted undergoing road tests at night at Sebring International Raceway in Florida this month.

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Unless the Lordstown facility is that out dated, I find it hard to believe it would take two years to retool that plant. It took ford slightly longer than a month to go from building the focus to sending the first test build of the ranger down the assembly line at Michigan Assembly.

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Reuss' charge: Reposition GM

Michael Wayland  /  December 17, 2018

DETROIT — As General Motors braces for a shifting industry landscape, its most difficult assignment may fall to Mark Reuss, the 55-year-old mechanical engineer and road racer who leads the company's far-flung Global Product Group.

Reuss has launched a restructuring of his operations, a vast network with 32,000 employees that includes r&d, engineering, design, safety, quality and product planning. His charge is to focus significantly more resources on autonomous and electrified vehicles — particularly battery-electrics — while streamlining GM's army of engineers.

The changes — effective Jan. 1 — include expanded duties for Reuss' top lieutenants as the company prepares to launch at least 20 battery-electric or fuel-cell-powered vehicles globally by 2023.

The restructuring is meant to better align the company's "priorities and accelerate our EV and AV development," said GM spokesman Mike Albano.

As with product czars across the industry, Reuss is working to keep traditional models updated while pivoting toward a new reality — in GM's case, an all-electric future with "zero crashes, zero emissions, zero congestion."

He's also shifting GM's vehicle lineup away from cars to crossovers, SUVs and pickups to align with customer demand.

"Reuss has got a challenge because consumers are still not buying into EVs yet," said Stephanie Brinley, principal automotive analyst at IHS Markit. "That's a balancing act a lot of companies are having to sort through right now."

The product development overhaul is connected to a multibillion-dollar restructuring announced by CEO Mary Barra last month. The companywide makeover could lead to the elimination of roughly 14,000 employees, including 15 percent of the automaker's North American salaried work force. It could potentially lead to closure of as many as seven plants around the world, including five in North America.

GM began head-count reductions last month for salaried contract workers after a voluntary buyout offer to 18,000 employees did not yield enough participants to hit the automaker's cost-cutting objectives.

Broader cuts to the salaried work force are expected in January. The company has not provided specifics on the number of cuts, but it is expected to be in the thousands.

The staff reductions will be followed by an end to production at three assembly plants and two powertrain facilities in North America throughout 2019 — potentially putting nearly 6,000 blue-collar workers in the U.S. and Canada on indefinite layoffs.

Redesigning engineering

The revamp of GM's Global Product Group includes more integration of the Global Propulsion Systems unit — the former GM Powertrain division — with other product group divisions. It also realigns priorities and responsibilities of senior leaders.

At least five vice presidents — half of Reuss' direct reports — will get expanded responsibility for electric and autonomous vehicles.

Dan Nicholson, global head of propulsion systems, will add oversight of electronic software and controls on all vehicles as well as responsibility for hardware development for EVs, including batteries and motors.

The changes affect such established GM engineering executives as Al Oppenheiser, longtime lead engineer of the Chevrolet Camaro, who will become a chief engineer focused on electric products.

Killing sedans

Reuss, a 35-year GM veteran and son of former GM President Lloyd Reuss, is expected to focus on new or redesigned crossovers, SUVs and pickups ahead of the larger push for electrification that will follow the expected debut of a next-generation EV platform in 2021.

The new EVs are planned to fill white space as the company ends production of six cars in 2019 — the Buick LaCrosse, Cadillac CT6, Cadillac XTS, Chevrolet Impala, Chevrolet Cruze and Chevrolet Volt — for the North American market. Those six have, on average, accounted for 46 percent of GM's U.S. car sales since 2012. But sales of the nameplates have been nearly cut in half during that same period.

The LaCrosse and CT6 will continue in China, while Cruze production continues in Mexico, China and Brazil for sales outside North America. Production of the XTS in China is expected to end in the next year or so.

Production in other markets could allow GM to import the vehicles in the event of a market shift back to cars. However, analysts don't believe GM would make such a move anytime soon.

It's unclear whether GM plans to continue using the Volt's Voltec plug-in hybrid system with extended-range capabilities. GM had been expected to use the technology in other vehicles, including a small crossover. However, those plans may have changed after the automaker announced in September 2017 its vision for a zero-emission future.

GM has faced outside pressure regarding its work force reduction and plan to shift focus to EVs. President Donald Trump last week said he doesn't believe the EV shift will succeed, and he asserted a new trade deal will make it harder for the company to move work out of the U.S.

"They've changed the whole model of General Motors," he said in an interview with Fox News. "They've gone to all-electric. All-electric is not going to work. ... It's wonderful to have it as a percentage of your cars, but going into this model ... I think is a mistake."

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Reuss’ lieutenants

General Motors is realigning responsibilities of senior leaders inside its Global Product Group to reflect new electrification duties. Among the changes:

  • Dan Nicholson, VP of global propulsion systems, becomes VP of electrical controls, software and electronic hardware, overseeing software and controls on all vehicles. He’ll also be responsible for electric vehicle hardware development, including batteries and motors.
  • Ken Kelzer, VP of global vehicle components and subsystems, becomes VP of global hardware components and subsystems.
  • Jim Hentschel, VP of global product integrity, becomes VP of global integration and systems.
  • Ken Morris, VP of global product programs, retains his title and adds propulsion responsibilities.
  • Doug Park, VP of global electric and autonomous vehicles, retains his title and adds responsibilities for the emerging technologies.

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A decade later, Janesville confronts life after GM

Nick Bunkly, Automotive News  /  December 23, 2018

JANESVILLE, Wis. - For years, this city refused to give up on the General Motors plant that had boosted the fortunes of blue-collar southern Wisconsin for generations and then closed, clinging to a sliver of hope that its shutdown during the Great Recession was only a temporary setback.

GM promised the plant might reopen once the economy turned around. Many in Janesville were convinced that was inevitable.

But despite years of surging auto sales, swelling GM profits and the comeback of big SUVs - the moneymakers that used to roll out of Janesville Assembly - that good news never came.

"I think I was the last person in the whole state to give up on it," said Mike Sheridan, who served for two years as speaker of the Wisconsin State Assembly after retiring in 2008 as president of the UAW local in Janesville. "I said, 'I'm not going to give up on it until they start bulldozing it.' Well, guess what — they started bulldozing it."

A decade after GM abandoned Janesville, the city of 64,000 people is in many respects a model of Midwestern resiliency.

Home foreclosures here in Rock County, after spiking in 2010 through 2012, have since dropped more than 80 percent. Bankruptcy filings, which doubled from 2009 to 2010, have fallen back to pre-recession levels as well.

The local unemployment rate — a bleak 13.6 percent in March 2009 — dipped to just 2.8 percent in October. That's better than the national average and even below the norm when Janesville Assembly was flourishing in the 1990s. County officials say $2 billion in private-sector investment since 2010 has created more than 5,000 full-time jobs. The local economy no longer hinges on the ups and downs of a single industry or employer.

But those numbers tell only part of the story.

Few of the jobs that have come to town since the recession pay as much as GM did, especially for those without a college degree or specialized training. One of Janesville's biggest newcomers, a Dollar General distribution center with about 500 employees, advertises pay of $15 to $16 an hour.

Contrast that with about $28 an hour, plus ample overtime, that a job on the GM assembly line provided a decade ago.

"You're just never going to match that," said Gale Price, the city's economic development director. "We're not going to bring car manufacturing back here."

On GM wages, families could afford nice vacations and maybe a boat or a camper. These days, more households are having a tough time merely covering the basics. Last year, 53 percent of students in the Janesville school district were eligible for free lunches, according to state data, up from 28 percent the year before GM left.

Extreme commutes

Many of the laid-off workers concluded that the best option to maintain their income was to transfer hundreds of miles away. That often meant leaving their families behind so spouses could keep working and children weren't uprooted from school, and also because it was nearly impossible to sell a house in Janesville at the time.

Older GM castoffs just needed to get in a few more years so they could retire with a full pension. Younger ones hoped they'd have to withstand the separation only for a little while before coming home when Janesville reopened.

"I've never seen anything like it," Price said. "A lot of families have been able to do it. Not every family survived it, unfortunately."

Many Janesville " '86ers," named for the year GM hired 1,200 people here, began making weekly or biweekly commutes to Fort Wayne, Ind., or Fairfax Assembly in Kansas until they could qualify for 30-and-out benefits in 2016.

Some went as far as Arlington, Texas, to keep building Chevrolet Tahoes and Suburbans at what had become GM's only remaining U.S. SUV plant in a market turning increasingly to car-based crossovers.

John Dohner, who was the shop chairman at Janesville Assembly when it closed, still makes the four-and-a-half-hour drive every other weekend from GM's pickup plant in Fort Wayne to Wisconsin, where his wife and two grown children live. He could have retired in 2015 but plans to stay at least through next year's contract talks.

"There's a small bunch of us left," said Dohner, now a second-shift committeeman at Fort Wayne, which is running overtime to build Chevy and GMC pickups. "It hurt for a long time, but life moves on."

Life in limbo

As the economy crumbled in late 2008, Janesville Assembly built its last GM vehicle, a black Tahoe LTZ, two days before Christmas. GM also closed an SUV plant in Moraine, Ohio, the same day, and Chrysler shut down an SUV plant in Delaware four days earlier. Combined, the closures put 3,300 assembly line workers out of a job, as Congress and the George W. Bush administration debated bailing out Detroit's automakers.

Six months later, a potential lifeline for Janesville materialized as GM reorganized in bankruptcy. Unlike the other closed factories that GM wanted off its books, Janesville became part of New GM as one of three plants put into an unusual limbo called "standby."

One of those plants, in Lake Orion, Mich., soon got a reprieve in exchange for huge tax incentives — Michigan offered a package worth five times the offer assembled by Janesville and Wisconsin officials — and union concessions that allowed lower wages. The flexible plant in Spring Hill, Tenn., started back up in 2012, when GM needed more capacity for the crossovers that had become huge sellers.

But with each year that passed, Janesville stayed dark.

No one wanted to give up hope, but having the situation unresolved for so long began to hinder the city's efforts to move on under the far more likely assumption that GM was gone for good.

Price said companies considering coming to town would invariably express concern about GM restarting production. Many liked Janesville's location and business climate but didn't want the auto plant to drive up wages and monopolize the best workers.

In 2015, GM finally slammed the door on Janesville, declaring the plant permanently closed in the new four-year contract ratified by GM's UAW members.

Dohner said local union members recently discovered a document signed by GM and UAW officials on Nov. 28, 2012, stating that Janesville Assembly would be formally closed when the next contract was signed. But no one told Janesville it could stop holding its breath.

100-year legacy

May 1, 2019, represents a big milestone for Janesville: the 100th anniversary of GM starting production here. The plant originally built Samson tractors before switching to Chevrolet cars in 1923. It was GM's oldest remaining plant when it closed and employed 7,000 people in its heyday.

Blackhawk Community Credit Union, founded within the plant in 1965 to provide workers with loans, aims to mark the centennial by breaking ground for a new headquarters along the Rock River that also will serve as a monument to Janesville Assembly and its influence on the area. It will be called the Legacy Center, said Dona Dutcher, its executive director, to celebrate "the legacy of our community — what we grew into because the plant was here."

"Even though it was closed, seeing it demo'd creates a whole other set of feelings," she said. "People need to know that not all is lost."

Dutcher made half a dozen trips inside the building to rescue memorabilia and said it had become an eerie time capsule while awaiting the revival that never came. File cabinets were full of papers, tool cribs and parts shelves were stocked, and 2008 calendars hung untouched on the walls. The UAW office still had a kitchen full of dishes and campaign buttons from the Local 95 elections in 2008 stuck in the ceiling.

By late November, the wrecking crew hadn't yet reached the plant's art deco-style front facade, but sunlight and twisted metal were visible through the glass front doors. Around the corner, debris was piled high behind a busy lot selling Christmas trees. The plant's narrow smokestack, a landmark visible across much of south Janesville, remained untouched, but its square blue GM logo had weathered off over 10 Wisconsin winters to faintly reveal "Samson" painted underneath.

Andrew Sigwell, who owns Zoxx 411 Club, a tavern bordered on three sides by the factory fence, has thoroughly documented the teardown with a drone camera nearly every day since it started.

"They move at a very rapid pace," said Sigwell, who bought a work table at the plant auction and installed it outside the bar for some nostalgia. "Once this front building comes down is when it's really going to make an impact. It will be really odd seeing that massive acreage open."

One recent video revealed a newly exposed line of ghostly white SUV body shells left behind on the plant's second level as if production had just stopped for the day. Dutcher said she wants to get one of the shells for the Legacy Center.

"I'm just about ready to give up hope that they will reopen," one former worker wrote below a Facebook photo showing a large section of the building down to the concrete foundation. "I guess maybe I'm stuck at Fairfax just a few more years."

Filling the void

After the rubble gets hauled away, the 250 acres GM occupied a block south of the meandering Rock River is to become an industrial park.

The state approved a $500,000 grant to help speed the $10 million demolition along, and Commercial Development, the plant's new owner, has promised to give away bricks salvaged from the building as keepsakes. Commercial Development's project manager for the site told the Milwaukee Journal Sentinel that Janesville Assembly is the ninth GM plant he's razed in a 37-year career.

The company has not disclosed any potential tenants for the Centennial Industrial Park, but city officials hope to eventually have up to 2,000 jobs on the site, which is served by two rail lines and a shortcut to the freeway that the city built for GM four years before the shutdown. That's about how many employees GM had in Janesville at the start of the plant's final year.

But most other manufacturing and industrial facilities don't create the sort of economic spinoff that auto plants do. And bringing new businesses to town often depends on state and local tax breaks or other incentives that can add up quickly.

Although most of the jobs don't have GM-caliber wages, Price said residents benefit from the area's low cost of living. "People can make a go of it," he said.

Castle Metals created 100 jobs in Janesville by consolidating two facilities in Minnesota and Illinois in 2015. Dollar General now serves about 850 stores in seven states from the aspirationally named Innovation Drive on the south edge of town. Upper Lakes Foods, which distributes to fast-food restaurants, has hired 100 people since coming here late last year. General Manager Craig Ryan said the company leased a warehouse that the city already had built in anticipation of a tenant, making Janesville an easy choice.

"At every hiring event, we've had plenty of applicants," Ryan said, though he wouldn't discuss wages because "there is some competition for workers in the area."

A soup-packaging company relocated to Janesville, and United Alloy, a longtime local business that makes generator fuel tanks, has expanded multiple times. W.W. Grainger, an industrial supply company, has added about 500 jobs in the last couple of years, Price said.

Among the projects that has local officials most excited is SHINE Medical, which is planning a $100 million plant in Janesville to manufacture a cancer-detecting, radioactive isotope.

"After all the pain and suffering, knowing where we're at today feels good," Price said. "Eventually, there's going to be another recession. We're hoping we're going to be a lot more diverse when it comes to that."

Moving forward

The restructuring bombshell GM dropped Nov. 26 — 14,000 job cuts, including the probable closure of five North American plants and a 15 percent reduction in salaried head count — created flashbacks for many people in Janesville. Sheridan recalled being a week into retirement as president of Local 95 when a GM vice president called with devastating news.

"He said it came down to a choice between Janesville and a plant in Michigan," Sheridan said. "They'd suffered a lot in Michigan, and he was a Michigan boy, and that all sort of played into it."

"We worked so hard to try and save that plant," Sheridan said. "We carried the whole corporation for a lot of years because we were the only ones building [big SUVs]. That was the only thing selling for years, and we couldn't work enough overtime."

When GM closed Janesville, dominoes cascaded through the community. Lear Corp. closed its Janesville seating plant, putting 800 more people out of work. Local charities that depended on sizable contributions from GM and its employees suffered.

"What middle class looked like in Janesville really changed," said Tim Perry, administrator of Crossroads Counseling Center, which used to get a third of its business from the GM plant, courtesy of the automaker's generous insurance benefits. "This was a town where General Motors employees lived next to doctors and lawyers. Now, there's more of a separation."

As laid-off workers began accepting far-off transfers to keep their paychecks coming in, the stress and distance took its toll on many families. Perry saw couples divorce and poverty increase.

"Those employees missed a lot of sports activities, school stuff, birthdays," he said. "It was real hard on them."

In the last couple of years, though, Perry said, he is "starting to feel a little bit of hope in the community." The economy has improved greatly, home values are higher, more jobs are available, and downtown Janesville has gotten busier again. Many of the workers who transferred have come back home for good, though Perry said some have found that readjustment stressful, too.

"That was such a monstrous institution," he said. "It felt like it was never going to go away. Now, to watch it get torn down, it's a surreal experience for a lot of people. A lot of people's lives were in there."

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The truck side of Janesville

1882—The Janesville Machine Co. was founded manufacturing farm machinery.

1918—General Motors bought the Janesville Machine Co., merged it with Samson Tractor Co. of Stockton, Calif., and built a new plant for Samson operations in Janesville.

1987—GM announces that Janesville will receive the remodeled version of its medium-duty truck, which will be transferred here from Flint, Mich. Total employment, hourly and salaried, stands at 6,500.

1989—Medium-duty truck production starts here with about 1,200 jobs, not 1,800 originally announced by GM.

1994—GM and Isuzu Motors work together to make commercial low-cab forward medium-duty trucks in Janesville. 600 workers from other idled GM plants transfer to Janesville.

2002—Production of medium-duty trucks moves back to Flint, Mich., taking 800 jobs from Janesville.

2008—GM officials announced that the medium-duty Isuzu truck line in Janesville will end production by the end of 2009. It employs fewer than 50 workers. GM also said it will close a plant in Toluca, Mexico with 400 hourly workers producing Chevrolet Kodiak medium-duty trucks.

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