Rumor: Declining Sedan Sales Could Lead to Model Discontinuations for GM
Industry analysts have determined that GM might be getting ready to phase out sedan models due to their declining popularity, which might affect factory jobs
By the end of 2017, General Motors wants to decrease the supply of vehicles it has from an 105-day supply to a smaller 70-day supply. To reach this goal, it recently extended the vacation shutdown period for several of its factories, namely ones that assemble passengers sedans.
In long term projections, however, a few extended factory shutdowns may not be enough to combat excess supplies. Now the United Automobile Workers union wants to know how declining sedan sales might affect the jobs of GM’s factory workers.
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UAW President Dennis Williams recently met with executives from GM to discuss the potential job threat that declining sedan sales create. At the center of the talks were underused General Motors car factories and plants across the country, like the Lordstown plant in Ohio where the Chevrolet Cruze is built.
“We are talking to (GM) right now about the products that they currently have,” Williams reported. “We are tracking it (and) we are addressing it.”
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As the automotive market moves away from sedans and passenger cars, GM’s solutions might develop from temporary factory shutdowns to permanent model discontinuations. Sources familiar with GM’s current plans have stated that at least six of GM’s passenger cars could be phased out by 2020 in favor of more popular utility vehicle models.
Included in the reported list of vehicles are the Buick LaCrosse, the Cadillac CT6, the Cadillac XTS, the Chevrolet Sonic, the Chevrolet Impala, and the Chevrolet Volt. It has been reported that the Volt could be exchanged for a hybrid crossover model by 2022.
Morgan Stanley analyst John Murphy has already predicted a major change for GM’s lineup in the next four years. His estimates conclude that fewer than 10% of new GM models introduced during that time period will be passenger cars.
The Hamtramck plant outside Detroit has been identified as one of the most vulnerable factories in GM’s lineup, due to the fact that it produces several at-risk vehicles. The Buick LaCrosse, Cadillac CT6, Chevrolet Impala, and Chevrolet Volt are all built here.
During the first half of the year, the Hamtramck plant built 35,000 vehicles, down 32% compared to the first half of 2016. Most GM factories assemble between 200,000 and 300,000 vehicles a year.
General Motors has not made any official announcements regarding the future of its sedan lineup. And while things might look full of gloom and doom for GM sedans according to analysts, General Motors seems much more confident in its sedans and factory operations.
“I don’t think we have too many sedans,” stated Alan Batey, president of GM’s North American operations. “We’re in a good place to have a good 2017.”
GM is working to make each vehicle sale more profitable by reducing fleet sales, much of which involve passenger sedans. Still, passenger car sales for GM decreased by 17% during the first half of the year, and with SUVs and crossovers growing more popular than ever, the number of GM sedans on the streets might soon be shrinking.
News Source: Reuters