EnG General Motors News

From my own Djup Strupe at the GM Spring Hill, Tennessee plant, comes the news that the notion of true plant closures here in the US are really gaining a great deal of momentum. That plant has been shut down since before Christmas, producing only a handful of cars as required to test and modify production equipment, procedures, engineering, etc. Full production is scheduled to re-start there today on one shift only. The Spring Hill plant makes the full-size Chevrolet Arcadia Traverse (thanks, Stephen and Ryan!) SUV and its Buick and Saturn kin.
In the past, GM was severely handcuffed by the United Auto Workers (UAW) union when it came to shuttering a production facility. The so-called “jobs bank” program that required automakers to continue to pay workers for up to two years even when they were not working made true plant closures almost impossible, not to mention the other costs of closures. Thus, many plants (see Chrysler) continued to produce vehicles even without a market for them simply because the marginal costs were low.
Now, with the Lansing, Michigan and Spring Hill, Tennessee plants making similar models and both operating at well less than capacity (Lansing is also at one-shift-per-day currently), it is doubtful that both can survive unless production from a third plant is shifted to one of them.
On top of that, it seems that GM has prepared the salaried employees for more job cuts in the very near future. I’m told that these cuts will be as deep as necessary to match the company’s current sales rate, which we all know is exceedingly low. Every GM employee knows where they stand in terms of seniority and job category and that will directly translate into longevity or lack thereof. It’s going to be tough. Very, very tough.
However, there are some “silver lining” moments, even as dire as things seem. For one thing, lower gasoline prices and deep discounts are making sales seem a little better, even if they aren’t sustainable. Additionally, some leading automotive indicators (heavy trucks, for instance) are looking as if they are creeping off the bottom toward recovery. New products such as our own 2010 9-5, the Chevrolet Camaro, etc. will create some sales.
In other news, General Motors Europe has reorganized to separate the marketing functions for Opel, Saab and Chevrolet into their respective business units rather than as a unified support function servicing all three brands. Thus, Saab marketing now rests solely with Jan-Ake Jonsson, with former GM Europe marketing chief Alain Visser assuming those responsibilities for Opel alone.
This makes sense given that General Motors needs to at least try to sell Saab to satisfy the demands of the bail out and the pending Swedish support.
As for Cadillac marketing in Europe, as Swade has questioned, GM states simply that “Sales of Cadillac outside of the United States were supported by strong growth of the brand in Latin America, Africa and Middle East (up 22 percent)“. What’s not stated here is that Cadillac sales in Europe, while still lackluster, did go up last year.
I’m thinking that Cadillac, with its hands full trying to survive in its home market, will pull back a bit from the European market given the cost of access and lack of growth. The most notable exception would be Russia, where General Motors in general has had a good run, and gasoline is plentiful and cheap.