The news that GM is closing five plants in North America, which will cause 15,000 people to be put out of work, has not been met with open arms.
While the GM team can attempt to place the blame for the plant closures on being a company that’s over capacity, this is certainly going to leave a black eye on the company and may cause federal subsidies to be taken away for the future. There’s even a governmental uproar that’s brewing around this action that may need a change of mind.
A Recent Announcement May Spell a Change
CEO of GM, Mary Barra, addressed the issues of the plant closings recently but only stated that they would keep an open mind regarding the future of the plants that are being closed. One plant is located in Ohio and the announced closing has caused an uproar from the two US Senators in the state and the President. The Senators have called for a shift of production by GM from another plant to the one in Lordstown, OH, which is the plant that’s being closed for the near future.
What’s Causing the Most Trouble for GM
The first topic of discussion that’s causing the governmental support for the plants that are being closed tobe filled with new vehicles is the fact that GM has several production facilities in Mexico. While they are a global automaker, the vehicles that are built in Mexico are imported into the US for sale and the production could be moved to plants in the US. The fact that GM has moved production out of the US and into Mexico for many years has caused an uproar and will need to be answered for.
GM Might be Violating Their Contract
Automotive workers in the US are typically protected by the strength of their union which is the UAW. The UAW negotiates a collective contract with the different automotive companies to create the working conditions that employees will fall under. The UAW has objected to the plan by GM to end production in some plants in 2019stating that it violates commitments made during the contract talks of 2015. The USA has asked that GM change its course and make a different decision that will keep plants open with a new labor contract on the horizon for next year.
What Will GM Do?
While the bottom line is for GM to protect its bottom line, the GM team should find a way to take a page out of the Ford book. Citing overcapacity is a problem that’s created internally, not by external factors. Ford has found a way to shift jobs around and keep all employees employed at the various plants even though they were the first to announce they were going to move away from passenger cars for the future. GM has some decisions to make before any of the plants are closed for good; hopefully, they will make the right decision.
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