Sign in to follow this  
Followers 0
jd2b

GMNA to Undergo Major Capacity Reduction

224 posts in this topic

Link



Next Significant Step in GM's North American Turnaround Plan
9 Assembly, Stamping & Powertrain Facilities, 3 SPO Facilities to Cease Operations
Total Reduction of 30,000 Positions
Total Cost Reduction Running Rate of $7 Billion by End of 2006

DETROIT - General Motors will undergo a wide-ranging restructuring of its manufacturing operations in the United States and Canada as part of its comprehensive four-point plan to return the company to profitability and long-term growth, GM Chairman and CEO Rick Wagoner announced today.

GM's next step in its North American turnaround plan addresses its ongoing capacity utilization, a major component of reducing structural cost. A total of nine assembly, stamping and powertrain facilities and three Service and Parts Operations facilities will cease operations.

The additional actions will reduce GMNA assembly capacity by about 1 million units by the end of 2008, in addition to the previously implemented reduction of 1 million units between 2002 and 2005. Factoring in the additional capacity from GM's new Delta Township facility in Lansing, Mich., slated to begin production next year, the overall net result will be a GMNA assembly capacity of 4.2 million units. While down 30 percent since 2002, this capacity level will still provide GM plenty of flexibility to anticipate and meet market demand, but in a much more cost-effective manner. A total of 30,000 manufacturing positions will be eliminated from 2005 through 2008.

"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," Wagoner added. "But these actions are necessary for GM to get its costs in line with our major global competitors. In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible.

"We continue to be equally committed to revenue drivers - introducing compelling new cars and trucks, and executing our revitalized sales and marketing strategy - and we have received ratification of the agreement with the UAW, which will help significantly to address our health-care cost challenges," Wagoner said. "We are making steady and significant progress in implementing the plan to turn around our U.S. business."

The following six assembly plant sites will be affected in the years indicated:

Oklahoma City, Okla., will cease production in early 2006.
Lansing, Mich., Craft Centre will cease production in mid-2006.
Spring Hill, Tenn., Plant/Line No. 1, will cease production at the end of 2006.
Doraville, Ga., will cease production at the end of its current products' lifecycle in 2008.
The third shift will be removed at Oshawa Car Plant No. 1, in Ontario, Canada, in the second half of 2006. Subsequently, Oshawa Car Plant No. 2 will cease production after the current product runs out in 2008.
The third shift will be removed at Moraine, Ohio, during 2006, with timing to be based on market demand.

Capacity-related actions affecting stamping, Service & Parts Operations and powertrain facilities include:

The Lansing, Mich., Metal Center will cease production in 2006.
The Pittsburgh, Pa., Metal Center will cease production in 2007.
The Parts Distribution Center in Portland, Ore., will cease operations in 2006; the Parts Distribution Center in St. Louis, Mo., will cease warehousing activities and will be converted to a collision center facility in 2006; the Parts Processing Center in Ypsilanti, Mich., will cease operations in 2007. One additional Parts Processing Center, to be announced at a later date, will also cease operations in 2007.
The competitiveness of all unitizing (packaging) operations at the Pontiac, Drayton Plains, and Ypsilanti Processing Centers in Michigan, as well as portions of the unitizing operations at the Flint, Mich., Processing Center will be evaluated in accordance with the provisions of the GM-UAW national agreement.
St. Catharines Ontario Street West powertrain components facility in Ontario, Canada, will cease production in 2008.
The Flint, Mich., North 3800 engine facility ("Factory 36") will cease production in 2008.
Given the demographics of GM's workforce, the company plans to achieve much of the job reduction via attrition and early retirement programs. GM will work with the leadership of its unions, as any early retirement program would need to be mutually agreed upon. GM hopes to reach an agreement on such a plan as soon as possible.

"These are difficult moves that will affect thousands of dedicated GM employees and families, as well as state and local governments," Wagoner said. "We will work our hardest to mitigate that impact."

There will be a significant restructuring charge in conjunction with this capacity announcement, and also with any related early retirement program. The details of these charges will be provided when available.

Wagoner also said the company has further accelerated its efforts in structural cost reduction, raising the previously indicated $5 billion running rate cost reduction plan in North America to $6 billion by the end of 2006. In addition, GM continues to pursue its plans to target $1 billion in net material cost savings. In total, the plan is to achieve $7 billion of cost reductions on a running rate basis by the end of 2006 - $1 billion above the previously indicated target.

"Our collective goal remains the same: to return our North American operations to sustained profitability as soon as possible, thereby helping to ensure a strong General Motors for the future," Wagoner concluded.

General Motors Corp. (NYSE: GM), the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM today employs about 325,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. In 2004, GM sold nearly 9 million cars and trucks globally, up 4 percent and the second-highest total in the company's history. GM's global headquarters are at the GM Renaissance Center in Detroit. More information on GM can be found at www.gm.com.

###

Forward-looking Statements

In this press release and in related comments by General Motors management, our use of the words "expect, anticipate, design, estimate, forecast, initiative, objective, plan, goal, project, outlook, priorities, target, intend, evaluate, seek, impact" and similar expressions, including references to what the future implementation of our restructuring plan and the tentative health-care agreement with the UAW will achieve, and when, in terms of cost savings and capacity reduction, is intended to identify forward-looking statements. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important factors that are described in GM's most recent report on SEC Form 10-K, which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: the ability of GM to realize production efficiencies, to achieve reductions in costs as a result of the restructuring and health-care cost reductions and to implement capital expenditures, all at the levels and times planned by management; the pace of product introductions; significant changes in the competitive environment; changes in laws, regulations and tax rates; the ability of the corporation to achieve reductions in cost and employment levels to realize production efficiencies and implement capital expenditures at levels and times planned by management; changes in relations with unions and employees/retirees and the legal interpretations of the agreements with those unions with regard to employees/retirees; shortages of and price increases for fuel; labor strikes or work stoppages; market acceptance of the corporation's new products; additional credit rating downgrades; and changes in economic conditions, commodity prices, currency exchange rates or political stability.
0

Share this post


Link to post
Share on other sites

Oklahoma City, Okla., will cease production in early 2006.


Isn't this the GMT360 extended vehicle (Trailblazer EXT/Envoy XL/Envoy XL Denali) production site?

Lansing, Mich., Craft Centre will cease production in mid-2006.


Goodbye SSR... It's a real shame. Too bad the vehicle wasn't more practical or affordable.

Spring Hill, Tenn., Plant/Line No. 1, will cease production at the end of 2006.


This is sad more for sentimental reasons.... What GM did with Saturn as a company as far as marketing and creating a 'culture' was remarkable and widely heralded. It's something that they should continue to pursue eventhough the Saturn HQ is no longer in operation.

Doraville, Ga., will cease production at the end of its current products' lifecycle in 2008.


The end of the CSVs as we know it?

The third shift will be removed at Oshawa Car Plant No. 1, in Ontario, Canada, in the second half of 2006. Subsequently, Oshawa Car Plant No. 2 will cease production after the current product runs out in 2008.


Wow... That is somewhat of a shocker to me. Aren't these the facilities that produce some of GM's best selling models, not to mention some of the highest quality facilities in the industry?

Secondly, could this mean the introduction of a major new architecture? Last estimates for the new GTO were 2008 right?
0

Share this post


Link to post
Share on other sites
Disgusting. Another nail in the GM coffin. Closing Oshawa #2 their most productive plant probably because if GM Canada didn't take some of the hit the UAW would go bananas.Eliminating a third shift at Oshawa #1 so I guess they've conceded that the Impala will never reach the sales of 300k again like a few years back. They sure are making it tough for the GM faithful. I have to wonder if I want to keep living in the past or if maybe I should just move on and be a fan of a car company of the future. RIP
0

Share this post


Link to post
Share on other sites

Disgusting. Another nail in the GM coffin. Closing Oshawa #2 their most productive plant probably because if GM Canada didn't take some of the hit the UAW would go bananas.Eliminating a third shift at Oshawa #1 so I guess they've conceded that the Impala will never reach the sales of 300k again like a few years back. They sure are making it tough for the GM faithful. I have to wonder if I want to keep living in the past or if maybe I should just move on and be a fan of a car company of the future.

RIP

[post="46010"]<{POST_SNAPBACK}>[/post]



That's what I'm worried about....

I thought the Impala was doing, and always has done well. Sure, I could see a reduction when the GP goes out of production IF GM replaces it with a RWD G8 but other than that I don't know.... Unless they have a lot of built in capacity up there that is not being used or unless GM is going to try to grow the G6, Aura and Malibu into their mainstay volume cars to compete with the CamCordImas of the world.

It does bother me that GM is crippling/destroying one of their highest ranked facilities and I hope this isn't them conceding the car market and saying; "Maybe someday sales will rebound, but right now we can't justify the investment" because that would be typical old GM think; to handicapp themselves with an outdated design and then think that the market is drying up.
0

Share this post


Link to post
Share on other sites
Oklahoma City, Okla., will cease production in early 2006. Bye-bye GMT 370s. Lansing, Mich., Craft Centre will cease production in mid-2006. No more SSR Spring Hill, Tenn., Plant/Line No. 1, will cease production at the end of 2006. End of line for Ion, not Spring Hill. Doraville, Ga., will cease production at the end of its current products' lifecycle in 2008. End of the line for the CSVs. The third shift will be removed at Oshawa Car Plant No. 1, in Ontario, Canada, in the second half of 2006. Sales not so hot for Impala Subsequently, Oshawa Car Plant No. 2 will cease production after the current product runs out in 2008. No more midsize W-bodies (and no more 3800). The third shift will be removed at Moraine, Ohio, during 2006, with timing to be based on market demand. Lower demand for GMT 360s
0

Share this post


Link to post
Share on other sites

Spring Hill, Tenn., Plant/Line No. 1, will cease production at the end of 2006.
End of line for Ion, not Spring Hill.


Thanks for clearing that up, it's great to hear!

The third shift will be removed at Oshawa Car Plant No. 1, in Ontario, Canada, in the second half of 2006.
Sales not so hot for Impala


This is a complete and total shocker to me... It seems that the Impala is doing well around here and was getting good reviews and selling well everywhere else.

I thought for sure it would continue building momentum from the last model (Of course, a lot of the last model was fleet)
0

Share this post


Link to post
Share on other sites

Subsequently, Oshawa Car Plant No. 2 will cease production after the current product runs out in 2008.
No more midsize W-bodies (and no more 3800).


I find this one the most interesting. They will have to replace the LaCrosse with something, unless they are going to can Buick altogether. Rumors before were that new RWD cars would come out of Oshawa #2 after the W-cars are done. I guess not. If the LaCrosse replacement is a FWD on Epsilon instead, where would it be built? Isn't the existing Epsilon plant (Fairfax) already at capacity?

-Andrew L Edited by rimtrim
0

Share this post


Link to post
Share on other sites

I find this one the most interesting. They will have to replace the LaCrosse with something, unless they are going to can Buick altogether. Rumors before were that new RWD cars would come out of Oshawa #2 after the W-cars are done. I guess not. If the LaCrosse replacement is a FWD on Epsilon instead, where would it be built? Isn't the existing Epsilon plant (Fairfax) already at capacity?

-Andrew L

[post="46032"]<{POST_SNAPBACK}>[/post]

I have been seeing TV commercials about the Lacrosse lately and one of them says "Built in the best plant in North America according to JD Power" , and now they are closing it, what a disgrace.

Fairfax isn't at capacity now but probably will be when the Aura is added there next fall. They could give Buick an Epsilon car and build it along side the G6 in Orion cause that plant could easily use another 100k worth of production. The big question now is what replaces Lacrosse and Grand Prix.
0

Share this post


Link to post
Share on other sites
Not suprised, I knew this would happen. It's pretty sad, if you put yourself in these people's shoes. Who are losing their jobs because of their employer's stupidity. Mainly their union the UAW/CAW who are making GM spend more than they make. So what's the point of this union anyways??? It's not protecting it's workers, cause now 30,000 of them wont have jobs! I go to school in Oshawa, and I know there will be allot of sad faces walking around the campus soon. Edited by Polish_Kris
0

Share this post


Link to post
Share on other sites

Not suprised, I knew this would happen. It's pretty sad, if you put yourself in these people's shoes. Who are losing their jobs because of their employer's stupidity. Mainly their union the UAW/CAW who are making GM spend more than they make. So what's the point of this union anyways???  It's not protecting it's workers, cause now 30,000 of them wont have jobs!  I go to school in Oshawa, and I know there will be allot of sad faces walking around the campus soon.

[post="46043"]<{POST_SNAPBACK}>[/post]


Keep buyin Toyotas, and you will see alot more sad faces in the US and Canada. Cheaper (some would even say unfair) Asian competition is what is ruining GM, not particulally the UAW. The UAW has been around for many, many, years with out any real problems.
0

Share this post


Link to post
Share on other sites
I can't believe Janesville Assembly dodged the bullet! It deserved to get the axe many times over with their cooperative workforce. Not my problem now, I'm glad I'm out of there, both Janesville Assembly and GM.
0

Share this post


Link to post
Share on other sites

And a big congratulations goes out to the UAW for making this possible.
</sarcasm>

[post="46045"]<{POST_SNAPBACK}>[/post]



You can't place the sole blame on the UAW. GM needs to build world class vehicles that consumers actually want to buy(without artificial demand).

c|d
0

Share this post


Link to post
Share on other sites
I wonder what the Rick Wagoner apologists think of this move. GM is going to shrivel up into a shadow of its former self. What a sad day.
0

Share this post


Link to post
Share on other sites

Keep buyin Toyotas, and you will see alot more sad faces in the US and Canada.  Cheaper (some would even say unfair) Asian competition is what is ruining GM, not particulally the UAW.  The UAW has been around for many, many, years with out any real problems.

[post="46048"]<{POST_SNAPBACK}>[/post]


The UAW has allot to do with this. GM had to cut costs to accompony the UAW's needs. Therefore quality did go down, because they had to buy cheaper parts, therefore, reliability goes down, and resale value, its a whole ripple effect. That's why people went for the Japs. And that is what brought down the American Auto Industry. If GM did not have to worry about the UAW, they would spend billions more into PRODUCT instead of politics.
0

Share this post


Link to post
Share on other sites

You can't place the sole blame on the UAW. GM needs to build world class vehicles that consumers actually want to buy(without artificial demand).

c|d

[post="46051"]<{POST_SNAPBACK}>[/post]


They can't do that, because they can't afford it. The have to spend the money they would have on product, on the UAW.
0

Share this post


Link to post
Share on other sites

I wonder what the Rick Wagoner apologists think of this move.

GM is going to shrivel up into a shadow of its former self.

What a sad day.

[post="46053"]<{POST_SNAPBACK}>[/post]

They already have.
0

Share this post


Link to post
Share on other sites

If the LaCrosse replacement is a FWD on Epsilon instead, where would it be built?

[post="46032"]<{POST_SNAPBACK}>[/post]


Perhaps the Lucerne and Enclave will be the only Buick products after the 2008 model year.
0

Share this post


Link to post
Share on other sites

Subsequently, Oshawa Car Plant No. 2 will cease production after the current product runs out in 2008.
No more midsize W-bodies (and no more 3800).


There goes one of the Auto industry's highest quality plants. ( I don't suspect they will win a quality award this year, morale has to be zero)
0

Share this post


Link to post
Share on other sites
I'm shocked that the new Impala isn't doing better. Granted that the external styling is nothing knock-your-socks off, but the interior is lights-out fantastic. Nice textures, nice feel on the radio controls, etc. I just drove my co-worker's less-than-a-week-old SS and it rocked. Steering had a nice feel to it, the traction control worked nicely when I put it into action. It seems like a nice, tight package. Perhaps the price is a little on the high side? I echo the Edmunds review when they called it the best Chevy sedan in quite some time.
0

Share this post


Link to post
Share on other sites

I'm shocked that the new Impala isn't doing better.  Granted that the external styling is nothing knock-your-socks off, but the interior is lights-out fantastic.  Nice textures, nice feel on the radio controls, etc.  I just drove my co-worker's less-than-a-week-old SS and it rocked.  Steering had a nice feel to it, the traction control worked nicely when I put it into action.  It seems like a nice, tight package.  Perhaps the price is a little on the high side?  I echo the Edmunds review when they called it the best Chevy sedan in quite some time.

[post="46075"]<{POST_SNAPBACK}>[/post]


The reason is it is against sales numbers of an incentive laden Impala.
0

Share this post


Link to post
Share on other sites

Keep buyin Toyotas, and you will see alot more sad faces in the US and Canada.  Cheaper (some would even say unfair) Asian competition is what is ruining GM, not particulally the UAW.  The UAW has been around for many, many, years with out any real problems.

[post="46048"]<{POST_SNAPBACK}>[/post]


Oh give me a break. Using that logic, European cars are also "ruining GM" because the Euro is sliding, and European makers have a slight cost advantage over domestic makers.

We live in a global economy. There are no longer "domestic" or "foreign" cars. Toyotas are built and designed in the US, Fords are built in Mexico, some GM cars are sourced from Korea. Globalization is a reality.

What "ruined" GM is GM itself; or rather the incompetent management which has run the company for so long. The same management that put out crap products in the 70s in 80s, causing a huge loss in consumer confidence, and a big boost for the Asian makers. Also it was management that agreed to ridiculous UAW contracts in the 80s, believing that GM was invinsible, because all they saw were profits for the short term, and they failed to look at the long term. It was also management that got GM near bankruptcy in the early 90s. It was also management that continually kept making false promises to people, which has led to a loss of trust in consumers, Wall Street, and the media, not to mention more of a boost for Asian automakers.
0

Share this post


Link to post
Share on other sites

Oh give me a break. Using that logic, European cars are also "ruining GM" because the Euro is sliding, and European makers have a slight cost advantage over domestic makers.

We live in a global economy. There are no longer "domestic" or "foreign" cars. Toyotas are built and designed in the US, Fords are built in Mexico, some GM cars are sourced from Korea. Globalization is a reality.

What "ruined" GM is GM itself; or rather the incompetent management which has run the company for so long. The same management that put out crap products in the 70s in 80s, causing a huge loss in consumer confidence, and a big boost for the Asian makers. Also it was management that agreed to ridiculous UAW contracts in the 80s, believing that GM was invinsible, because all they saw were profits for the short term, and they failed to look at the long term. It was also management that got GM near bankruptcy in the early 90s. It was also management that continually kept making false promises to people, which has led to a loss of trust in consumers, Wall Street, and the media, not to mention more of a boost for Asian automakers.

[post="46079"]<{POST_SNAPBACK}>[/post]


Exacally! what I'm saying!

Some people on this board should stop blaming the imports for GM's problems!
0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

Loading...
Sign in to follow this  
Followers 0



  • Who's Online (See full list)

    There are no registered users currently online

  • Who's Chatting

    There are no users currently in the chat room