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General Motors Transitions

Self-driving cars (AVs) and electric cars (EVs) have been Road Rules’ topics for many years.  Of the two, EVs have moved more quickly from futuristic prototype to being drivable in the here and now.  But AV development is also proceeding quickly.  All major auto manufacturers are heavily invested in it; engineering departments in the top universities in the world compete to push the cutting edge of the hardware, software, and the ‘internet of things’ innovation that will take AVs past the prototype stage faster than we can imagine.

At the time of writing, further proof of the steady pace of these developments has come in an announcement from General Motors that it will “lay off up to 14,000 factory and workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric vehicles.”  GM’s CEO has been quoted as saying, “GM … is making the cuts to get in front of it while the company is strong and while the economy is strong.”

GM says that many of those who will lose jobs are now working on conventional cars with internal combustion engines, but that GM is hiring people with expertise in software and electric and autonomous vehicles.  The industry is changing rapidly, and moving toward electric propulsion, autonomous vehicles, and ride-sharing is an adjustment GM must make. GM reports that it has invested in newer architectures for trucks and SUVs so it can cut capital spending while still raising investment in autonomous and electric vehicles.

The factories up for closure are part of GM’s effort “to right-size our capacity for the realities of the marketplace,” as consumers shift away from cars to trucks and SUVs.  Those said to be on the list in the US are the Detroit/Hamtramck assembly plant, which makes the Buick LaCrosse, the Chevrolet Impala, and Volt, and the Cadillac CT6, all slow-selling cars. LaCrosse and Volt production will end March 1, while CT6 and Impala production will stop June 1.  The Lordstown, Ohio plant which makes the Chevrolet Cruze compact car also is on the list with production of the Cruze ending March 1, 2019.  The Warren, Michigan, transmission plant will stop producing six-speed transmissions on August 1, 2019; the Baltimore transmission plant will stop production April 1.

Canada is also affected. GM’s plant in Oshawa, Ontario—a huge and modern plant employing 2,500 unionized and 300 non-unionized workers—producing the Chevrolet Equinox, Cadillac XTS, Chevrolet Impala, and Buick Regal has no production allocated past December 2019.  This is historic, GM’s Oshawa plant dating back to 1953, by the early 1980s employing over 23,000 workers, and recently distinguishing itself as the only factory in North America capable of building both cars and trucks.

While other GM operations in Ontario are not on the list, the ripple effect throughout the southern Ontario economy, and indeed the whole Canadian economy could be significant.  Certainly, for the Oshawa community a challenging and difficult adjustment period lies ahead.