Thread: BREAKING Report: GM Closing All Operations in Oshawa Canada….

BREAKING Report: GM Closing All Operations in Oshawa Canada….



November 25, 2018 by sundance


Canadian media are reporting that General Motors plans to shut down operation in Oshawa, Canada. This is quite possibly an outcome that portends the sign of things to come…

CANADA – Numerous sources have told CTV Toronto that General Motors is planning to close all operations in Oshawa, Ont., affecting thousands of high-paying jobs.


The announcement is expected to be made on Monday, in the city of about 159,000 people located roughly 60 kilometres east of Toronto. Sources said they believe the Oshawa closures are part of a global restructuring. (read more)

GM holds considerable risk exposure within the current state of international trade and economics as it relates to the auto industry. As a result of the ongoing U.S-China trade confrontation, GM holds risk as a result of heavy investment in China. Add to that exposure the very significant financial impacts about to start for heavy manufacturing operations inside countries aligned with the Paris Climate Treaty, and the risk increases.



Specifically for auto-manufacturers the regulatory costs are unique. If a manufacturer is depended on the U.S. market as a destination for their products, and the company has existing manufacturing within the U.S, the cost differential means they will likely have to absorb any climate change (regulatory/tax) cost in addition to the looming Trump tariffs.


The best financial play is to drop some of the risk and focus on execution of a business model within the market that is of primary value; that’s the USA. I would surmise those cost analytics are part of the dynamic at work.



Additionally, last week there was a quiet report of the White House inviting the major EU (mostly German) auto companies for a meeting. [SEE HERE] The German auto companies cannot negotiate trade terms on behalf of the EU; however, their unrecoverable investments in Mexico are surely leverage Trump will use to push their influence over Angela Merkel.

(Reuters) […] The White House has extended an invitation to German carmakers through the U.S. Embassy in Berlin for a meeting with Economic Adviser Larry Kudlow and Secretary of Commerce Wilbur Ross, said one of the sources.
It was not immediately clear if the U.S. ambassador to Germany, Richard Grenell, or President Donald Trump would take part.


U.S. officials have grown impatient with the lack of progress on trade issues after a meeting between Trump and European Commission President Jean-Claude Juncker in July. (read more)

In Germany, whoever and whatever the auto-sector supports – that’s where the political alignment goes.


So there is a three-way economic strategy at play. First, on policy – the Paris treaty means all heavy manufacturers within aligned countries will drive up costs. Secondly, on economics – access to the U.S. market is being leveraged by President Trump via Steel/Aluminum and auto tariffs. And less obviously, thirdly – a very real possibility of economic/financial punishment underpinning Trump policy as a result of political antagonism via NAFTA (Canada) and Brexit (EU).


I cannot emphasize enough how strategic President Trump is toward the subtle impacts of his MAGAnomic ‘America-First’ policies.
President Donald Trump is stunningly unique. MAGAnomic policy influences behavior through the application of leverage. However, rather than focus on an attempt to forcibly shift the market through politics, Trump attains his desired balance objective by focusing MAGA policy in a stunningly unique way, he focuses on shifting the landscape underneath the decision.


To help explain the dynamic, I’ve created this graphic:



Traditional politicians have always directed their policy efforts at the political side of the economy. [ie. make, enforce or eliminate a regulation to change the decision-making of those who are in control of the market.] However, within that approach the cause and effect takes time.

President Trump, works with a sense of urgency in all things. He doesn’t like to wait for policies to take effect; instead he goes deeper into the dynamic and focuses on the root of the issue – in this economic example, trade is the economic fulcrum.


MAGAnomics is all about moving the fulcrum to achieve the desired result. In the goal of gaining manufacturing investment, Trump’s sense of urgency, creates policies that in turn create a similar immediacy. [ie. capital expenditures can only be written off if the capital expense is invested within a short window]. As a consequence there is a larger benefit to the investor if the action is taken quickly. [See FoxConn Wisconsin etc.]


Investment is fast, rapid and generates ancillary benefits at greater speed. Hence, manufacturing employment accelerating faster than any time over the past 30 years. In the current example, what do you think will happen in GM’s USA operations with the withdrawal from Canada? More speed in U.S. manufacturing base hiring. That urgency means rapidly higher wages (longer shifts and overtime), in short, more pay.


President Trump doesn’t try to guide the mouse through the maze to the intended destination. Instead he just moves the location of the cheese and the mouse travel changes accordingly. This approach dramatically shifts the speed of goal attainment.
This approach is partly what defines the unique speed of Trump.






https://theconservativetreehouse.com...oshawa-canada/

YES!! I so hope this is true! And this should have always been the model, to produce in the market you serve. YES!! Oh God, I love this President so much!!! He is so brilliant and truly truly understands our economy, all its components. He is the American Epitome of the American Protectionist.

Thank you for the great news, Sundance and GeorgiaPeach!!

GM to slash jobs and production, cancel some car models


JOSEPH WHITE AND DAVID SHEPARDSON
Nov 26th 2018 11:07AM

X

DETROIT/WASHINGTON, Nov 26 (Reuters) - 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. Its shares rallied 7.6 percent to $38.66.

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 Cruze compact car will be discontinued in the U.S. market in 2019.

RELATED: 10 cars being discontinued in 2018

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Plants in Baltimore, Maryland, and Warren, Michigan that assemble powertrain components will 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 them.

"We are right-sizing capacity for the realities of the marketplace," Chief Executive Mary Barra said, adding that the cuts were prompted by auto industry changes. Barra said the company will double resources dedicated to electric and self-driving vehicles over the next two years.

The UAW union vowed to "confront this decision by GM through every legal, contractual and collective bargaining avenue open to our membership."

"General Motors decision today to stop production at the Lordstown, Ohio, and Hamtramck, Michigan, assembly plants will idle thousands of workers, and will not go unchallenged by the UAW," Terry Dittes, UAW Vice President in charge of negotiations with GM, said.

In a statement, Detroit Mayor Mike Duggan described the news as "troubling" and said that the city's economic development team and the UAW union are "working together to come up with a solution that works for GM and the employees."

Canadian Prime Minister Justin Trudeau said he spoke with Barra and expressed "deep disappointment."
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.

SMALLER WORKFORCE

Its North American salaried workforce, including engineers and executives, will shrink by 15 percent, or about 8,000 jobs. The company said it will cut executive ranks by 25 percent to "streamline decision making."
Even as GM is moving to lay off salaried staff, the company is hiring. At GM's Detroit headquarters on Monday, there were signs directing people to a "New Hire Orientation" meeting.

Barra said GM 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 the early 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.

Cost pressures on GM and other automakers and suppliers have increased as demand waned for traditional sedans. The company has said tariffs on imported steel, imposed earlier this year by the Trump administration, have cost it $1 billion.

Barra did not link Monday's cuts to tariff pressures, but said trade costs are among the "headwinds" GM has to face as it deals with broader technology change and market shifts.

With U.S. car sales lagging, several car plants have fallen to just one shift, including its Hamtramck and Lordstown, assembly plant.

A rule of thumb for the automotive industry is that if a plant is running below 80 percent of production capacity, it is losing money. GM has several plants running well below that. Consultancy LMC estimates that Lordstown will operate at just 31 percent of production capacity in 2018.

Barra said the automaker is running at about 70 percent capacity utilization in North America, and the company will provide an update on how the latest moves will improve utilization in January.

"We need to make sure that we are well positioned to compete, not just over the next few years, but well beyond," she said.

Unlike its plants making passenger cars, many of GM's plants producing its higher-margin trucks and SUVs are running on three shifts, with some running six and sometimes seven days a week to keep up wih demand.
Rivals Ford Motor Co and Fiat Chrysler Automobiles NV have both curtailed U.S. car production. Ford said in April it planned to stop building nearly all cars in North America.

SEDANS OUT OF FAVOR

The industrywide slowdown in passenger car sales started to pick up steam in 2017.

The shift by U.S. consumer preferences have been away from passenger cars to larger, more comfortable SUVs and pickup trucks has been swift and severe, leaving automakers scrambling to readjust.

As recently as 2012, passenger cars made up more than 50 percent of all U.S. new vehicle sales. Through the first nine months of 2018, that had fallen to a little over 31 percent.

While industry-wide passenger car sales were down 13.2 percent through the first nine months of the year, pickup truck and SUV sales rose 8.3 percent. As well as being roomier, the fuel economy on SUVs and crossovers has improved significantly.

Sales of Cruze, built at Lordstown, fell 27 percent through September 2018. Impala, which is built at Oshawa and Hamtramck, was down 13 percent. Buick LaCrosse and Cadillac CT6, which are built at Hamtramck, were down 14 percent and 11 percent, respectively.

https://www.aol.com/article/finance/...dels/23601258/

"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 Cruze compact car will be discontinued in the U.S. market in 2019."

And some people think Trump is a genius and they love him?

"General Motors decision today to stop production at the Lordstown, Ohio, and Hamtramck, Michigan, assembly plants will idle thousands of workers, and will not go unchallenged by the UAW," Terry Dittes, UAW Vice President in charge of negotiations with GM, said.

In a statement, Detroit Mayor Mike Duggan described the news as "troubling" and said that the city's economic development team and the UAW union are "working together to come up with a solution that works for GM and the employees."