UPDATE: Cadillac recently announced the CT6 would NOT be discontinued.
General Motors made a major announcement that aims to reshape the company’s production output and workforce past 2019. After next year, five production plants will effectively go offline. Vehicle assembly at Detroit-Hamtramck in Michigan, Lordstown Assembly in Ohio and Oshawa Assembly in Ontario, Canada will cease production by the end of 2019. In the process, vehicles produced at those plants will also die at the end of next year.
While we often discuss manufacturers discontinuing their models — Ford is a major recent example of that — this story goes much further. Beyond GM’s plan to lay off 15 percent of its salaried corporate employees, or about 8,100 people, the decision to idle production plants affects even more. Altogether, ending allocation at the five plants, including Baltimore Operations in Maryland and Warren Transmission Operations in Michigan in addition to the other three, will affect more than 6,000 hourly and salaried workers.
So, what does that all mean? Hundreds of workers walked off the job at Oshawa Assembly, and unions representing the workers expressed their outrage at the decision. GM’s share prices, on the other hand, rose about 6 percent upon the news yesterday.
The affected plants also produce models which have fallen out of popularity in recent years. That includes the aging Cadillac XTS and Chevrolet Impala, as well as the Cadillac CT6, Buick LaCrosse, Chevrolet Volt and Chevrolet Cruze. While the Cruze is still a volume seller for GM, its sales have slipped as crossovers gain ground. As the company kills off these cars and the plants that produce them, here’s what it means for workers and for you, the car-buying public.
Update 11/27/18: Included list of discontinued models.
GM’s Dead Cars: 5 Cars That Will Die in 2019
Cadillac XTS: 2013 – 2019
- Assembly: Oshawa Assembly Plant (Oshawa, Ontario, Canada)
- Employees: 2,522
It’s likely you don’t know anyone who actually owns an XTS, and there’s a good reason for that. This car is mainly sold to limousine and taxi companies. GM did recently update this car, and its sales have picked up over the past year. In fact, it’s the only car of the six that has improved. Despite selling 12,664 units this year — 15.9 percent more than the first nine months in 2017 — its sales pale in comparison to Cadillac’s crossovers.
Workers at the Oshawa plant have built more than 25 GM models since it first went online in 1953. The plant currently produces the XTS as well as the Chevolet Impala, another car near the end of its life. Oshawa currently builds the previous-generation Chevrolet Silverado and GMC Sierra, which were slated to end production in 2019 before GM’s announcement.
With the death of the Impala and XTS, Oshawa’s 2,522 workers may have to look elsewhere for work. As the plant has been around for over sixty years, it’s also a staple of the local economy. When the plant goes offline, it will surely have a huge impact on the community. Although, Canadian officials have pledged to help displaced workers find new jobs, should GM ultimately lay them off when production ends next year.
Chevrolet Volt: 2011 – March 1, 2019
- Assembly: Detroit-Hamtramck Plant (Detroit, Michigan)
- Employees: 1,542 (1,348 hourly and 194 salaried)
The Volt was a noteworthy entry into the hybrid game, as it was originally supposed to be an all-electric vehicle. However, as it debuted as a concept at the 2007 Detroit Auto Show, it featured a smaller, less expensive battery pack tied to gasoline range extender. It originally had a 38 mile range, while the second-generation model can drive up to 53 miles on all-electric power.
However, as GM brought out the all-electric Bolt, this car ended up getting lost in the EV shuffle. Its yearly sales numbers bear that out, as the Volt slipped 13.7 percent from the first nine months of 2017.
Again, Detroit-Hamtramck’s workers will be affected as this model, as well as the Cadillac CT6, Chevrolet Impala and Buick LaCrosse, cease production by the end of next year.
Buick LaCrosse: 2005 – March 1, 2019
- Assembly: Detroit-Hamtramck Plant (Detroit, Michigan)
- Employees: 1,542 (1,348 hourly and 194 salaried)
Speaking of the Buick LaCrosse, it’s another casualty of GM’s decision to shut production at Detroit-Hamtramck. The model has actually been around awhile, although its assembly point has shifted around. The first generation model was built at Oshawa, the second generation was built in Kansas City, and now it’s moved to Detroit.
If you need proof that big sedans aren’t selling, you need look no further than the mid-size LaCrosse (or the full-size Chevrolet Impala, for that matter). Like the Cadillac CT6, LaCrosse sales are down 14.2 percent from the first nine months of 2017. It’s large, luxurious and fairly handsome, particularly in Avenir trim. As the market moves on to crossovers, though, that isn’t enough.
As Buick shifts heavily toward crossovers — sales of the Enclave and Encore are up this year — the LaCrosse has been left in the cold. While Michigan’s unemployment rate currently sits at around 4.0 percent, according to the Bureau of Labor Statistics, Detroit-Hamtramck’s closure will certainly impact the workers as it employs more than 1,500 people in the area.
Chevrolet Impala: 1958 – Q4 2019
- Assembly: Detroit-Hamtramck Plant (Detroit, Michigan) and Oshawa Plant (Oshawa, Ontario, Canada
- Employees: Detroit: 1,542 (1,348 hourly and 194 salaried); Oshawa: 2,522
Impala is one of Chevrolet’s oldest current nameplates. It’s been around since 1958, although there have been some interruptions in its production run. The current model has been around since 2014, and it’s assembled at both the Detroit-Hamtramck plant and the Oshawa plant. As with all the other models on this list, slow sales are huge factor in the Impala’s imminent demise.
Mind you, Chevrolet has shifted 43,952 units so far this year. That doesn’t sound too bad, but there are two caveats. The Impala is sold in large quantities to fleet customers, and that figure is still a 13.4 percent drop on the first nine months of 2017. As with the Ford Taurus and Nissan Maxima, the Impala is a large car in a market that has largely moved on from large cars.
This one will also hit workers at both Detroit-Hamtramck and Oshawa, as GM abandons the vast majority of its traditional cars. Combined, the plants employ over 4,000 people, to say nothing of those affected by the last car on this list (below).
Chevrolet Cruze: 2008 – March 1, 2019
- Assembly: Lordstown Assembly (Warren, Ohio)
- Employees: 1,618 (1,435 hourly and 183 salaried)
The Chevrolet Cruze is was another big surprise on GM’s kill list, as it’s still a strong seller. So far this year, Chevrolet has moved 109,662 units. That makes it the brand’s second-best-selling model, after the Equinox crossover. However, it’s still down 26.5 percent over the first nine months of 2017. In the third quarter alone, sales were down nearly 30 percent. While it’s Chevy’s best-selling sedan, it doesn’t come anywhere near the top of the segment, where the Toyota Corolla and Honda Civic dominate.
Sadly, that affects everyone at the Lordstown Assembly plant, as it’s devoted entirely to building the Cruze. In fact, the latest-generation Cruze was revealed at the Lordstown plant. Historically, the plant has built 16.3 million vehicles since it opened in 1966. As the plant’s been around for 52 years, its closure will have a marked effect on the local community.
President Trump weighed in on the Lordstown plant closure. He told reporters, “They better damn well open a new plant there very quickly,” according to a CNBC report. General Motors CEO Mary Barra insisted the move to halt production at these plants was a pre-emptive move to make the company more maneuverable in the future, according to yesterday’s statement.
The impact
As GM moves toward crossovers, as Ford and Fiat Chrysler have, it proves cars aren’t enough to keep these plants open. Demand has fallen, and by extension production has fallen. Sedans are not as profitable as crossovers, large SUVs and trucks. As a result, companies are adjusting toward what’s profitable.
That doesn’t bode well for workers, of course, as more than 6,000 now face possible layoffs from the affected plants. If you’re in the market for one of these cars, it will also limit your options moving forward. However, if GM does in fact innovate and shift its resources toward electrification and autonomous vehicles, it could create more jobs in the future. Super Cruise is only on the Cadillac CT6 for now, but it will certainly expand to other GM vehicles. As the technology becomes more prevalent, so too will GM need more people to develop, test and implement it.
