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GM to cut production at 5 plants in North America, kill several models

DETROIT/WASHINGTON — General Motors Co said on Monday it will cut production of slow-selling models and slash its North American workforce in the face of a stagnant market for traditional gas-powered sedans, shifting more investment to electric and autonomous vehicles. The announcement is the biggest restructuring in North America for the U.S. No. 1 carmaker since its bankruptcy a decade ago. GM said it will take pre-tax charges of $3 billion to $3.8 billion to pay for the cutbacks, but expects the actions to improve annual free cash flow by $6 billion by the end of 2020. GM plans to halt production next year at three assembly plants: Lordstown, Ohio, Hamtramck, Michigan, and Oshawa, Ontario. The company also plans to stop building several models now assembled at those plants, including the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse, the sources said. Sources said the Chevrolet Volt, Impala and Cadillac XTS would also be discontinued. Signs of the demise of six passenger-car models have been swirling since July. Plants in Baltimore, Maryland, and Warren, Michigan, that assemble powertrain components have no products assigned to them after 2019 and thus are at risk of closure, the company said. It will also close two factories outside North America, but did not identify those plants. The AP reported that 14,700 jobs would be affected. Some 8,100 of those would be white-collar jobs reduced through buyouts or layoffs. The No. 1 U.S. automaker signaled the latest belt-tightening in late October when it offered buyouts to 50,000 salaried employees in North America. The company also said it will cut executive ranks by 25 per cent to "streamline decision making." Some 6,000 factory workers could lose their jobs or be transferred to other plants. Its shares were last up 6.2 percent at $38.16. Tariff 'headwinds' and cost-cutting GM Chief Executive Officer Mary Barra told reporters on Monday the company can reduce annual capital spending by $1.5 billion and increase investment in electric and autonomous vehicles and connected vehicle technology because it has largely completed investing in new generations of trucks and sport utility vehicles. Some 75 percent of its global sales will come from just five vehicle architectures by early in the 2020s. It plans to reduce annual capital spending to $7 billion by 2020 from an average of $8.5 billion a year during the 2017-2019 period.

General Motors shaking up its marketing... again

One of the things that dogs the full comeback of General Motors is the instability of its marketing. That part of the automaker got yet another big shakeup today when GM confirmed what I have been tweeting for a few days - strong rumors that the Chevrolet and Cadillac ad accounts are walking to new ad agencies.
Cadillac, GM's luxury brand, is going into review from Fallon Worldwide, Minneapolis and the indications are that Campbell-Ewald, Chevy's old ad shop, will end up with most or all of it. C-E just announced that it was moving from its long-time home in Warren, MI to a new downtown Detroit office next to Ford Field, just blocks from GM.
The other shoe to drop shortly will be the shift of GM's most important brand, Chevy, from Goodby, Silverstein & Partners of San Francisco to McCann-Erickson of Troy, MI. McCann used to be the agency for Buick and GMC, as well as GM's corporate advertising, and has retained some pieces of business over the last few years. Sources have even told us that it was McCann that did a lot of the creative work on Chevy's new ad platform, Find New Roads. (Not to be confused with a former McCann tagline for Saab, "Find Your Own Road.")

GM invests $24 million to build more crew cab trucks in Fort Wayne

The full-size pickup truck arms race continues unabated here in the United States as Ford, General Motors and Fiat Chrysler battle back and forth for sales supremacy. The Ford F-Series of trucks continues to lead the field in sales (214,611 units sold through the first quarter of 2019), but the race for second place has been a lot more interesting to watch. That's because Ram, long a distant third in truck sales, eked its way past Chevrolet late in 2018 and has managed to hold the position so far in 2019. Don't take this to mean that sales of GM's trucks have been poor across the board. In fact, the automaker reports that sales of its four-door crew cab pickups are up 20 percent in 2019 over the same period a year ago. And that's what makes GM's announcement today so interesting. The automaker is investing $24 million into its assembly plant in Fort Wayne, Indiana to build more Chevy Silverado and GMC Sierra pickup trucks, and the focus will continue to be on crew cab models. "We are building Chevrolet and GMC crew cab pickups at record volume and mix levels to meet customer demand and the $24 million investment will allow us to build even more," said GM chief Mary Barra in a statement. "Crew cab sales have been very strong, and we are expanding customer choice with new models, more cab choices and innovative new powertrains." It's worth noting that, if crew cab sales are up 20% this year, but overall sales are down (over 15% for Silverado and around 2% for GMC), that means it's the cheaper regular cab and double cab models that are lagging. At the same time, sales of the midsize Chevy Colorado have surged 16%. And finally, if you combine sales of the Silverado and Sierra into one bucket, GM still has a comfortable lead over Ram overall. If there's a takeaway here, it's that trucks of all shapes and sizes have been, currently are and will surely remain hot in America, and automakers will continue to invest money into making sure they are able to satiate consumer demand.