General Motors to Close Canada Plant Amid Push Toward EVs (Updated)

GMC trucks being made at the Oshawa plant
GMC trucks being made at the Oshawa plant
Photo: GM
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General Motors is shutting down a plant as part of a global restructuring, Aston Martin looks to double production by 2025, subprime auto loans and more await you in The Morning Shift for Monday, Nov. 26, 2018.


1st Gear: It’s Reportedly Going To Be Official-Official Like An Hour After This Is Published

General Motors has been kicking around a plan to restructure the company across the globe for some time now, as it makes a big push into the electric and autonomous vehicle space, with 20 new electrified models planned by 2023. That includes a rather haphazard attempt earlier this year to scuttle its Korean operations. And GM had just recently offered buyouts to more than 18,000 workers, with the expectation that layoffs could follow next.

Now the company has its sights set on a factory in Ontario, Canada that makes a lot of familiar, non-EV models, like the Chevy Impala, Buick Regal, Cadillac XTS, and it finishes the Chevy Silverado and GMC Sierra Trucks.

It’s a move that’s sure to upset officials and workers across the region.

And more big moves might be forthcoming, per The Globe and Mail:

General Motors is shuttering its plant in Oshawa as part of a restructuring of its global operations to focus on autonomous and zero-emission vehicles, sources say.

Two sources, who were briefed on General Motors’ plan, said the Oshawa plant will be completely closed down. Those sources said Canada isn’t the only country affected by the auto giant’s move to shift its investment away from traditional vehicles.

Unifor, which represents about 2,500 workers at the plant, told the newspaper that no product has been allocated to the assembly plant beyond 2019.

GM cars have been built in Oshawa since before there was even a GM in 1908 (starting with contract production of Buicks, which was then an independent company). General Motors also has its Canadian administrative headquarters in Oshawa, and it’s a little unclear whether this just affects the factory, or all of GM’s operations there.


An official announcement is reportedly expected at 10 a.m.

Update, 10:50 a.m.: The closure of the Oshawa plant has been confirmed, along with plans to shut down GM’s Detroit-Hamtramck Assembly in Detroit, Lordstown Assembly in Warren, Ohio, and the propulsion plants Baltimore Operations in White Marsh, Maryland and Warren Transmission Operations in Warren, Michigan, all in 2019.


Canadian Prime Minister Justin Trudeau also tweeted about the closure:


2nd Gear: Nissan’s CEO Has the Floor Now

It’s only been a week since the announcement of Carlos Ghosn’s arrest, prompting nonstop coverage about What It Means and some such for the tortured structure of an alliance between Nissan, Renault and Mitsubishi.


Word of Ghosn’s arrest for alleged financial misconduct came by way of Nissan CEO Hiroto Saikawa, who worked under Ghosn, and who’s the focus of a lengthy feature in Automotive News today:

Saikawa is now using Ghosn’s ouster to undo much of his erstwhile mentor’s work at Nissan Motor Co. If it seemed the 65-year-old would be a transitional chief, he’s suddenly talking like a transformational one, eager to get the carmaker back on track in Japan and the U.S.


What does that mean?

Saikawa pledged to take “visible countermeasures” to rectify Nissan’s course.

“This will give us a good opportunity to revise the way we work,” Saikawa said.

Executives will keep a closer eye on operations, he promised. The company will also redouble its focus on Japan, a crucial market in which sales had slumped under Ghosn: Deliveries in fiscal 2018 were down 31 percent from 2005's level.

And more importantly, Saikawa said, Nissan will work to reform the delicate management structure that bonds Nissan with French partner Renault and smaller Japanese ally Mitsubishi into a corporate alliance of complicated cross-shareholdings.


Let’s just assume he means he’s bringing back the Nissan 240SX. Drift cars for everyone.

3rd Gear: Subprime Originations Up

Ever since late 2016, subprime auto loan originations have been flat, as lenders finally came to realize that its decision to loosen up credit access—thereby prompting record auto sales—had resulted in more and more defaults. That’s not good—for an extremely long list of reasons, as we’ve previously covered—but times are good, and so subprime auto loans are back in action.


In a rather perverse framing of the news, Automotive News deemed this a “positive sign” for us. Why? There’s better tech, or something:

According to the New York Federal Reserve’s latest “Household Debt and Credit Report,” auto originations for all credit scores reached $157.6 billion, up about 5 percent from a year ago. That number includes loans and leases, new and used vehicles combined.

Subprime origination increases are happening alongside industrywide progress in adopting more technology in underwriting. As more companies take advantage of techniques such as machine learning models, lenders are gaining the confidence to dip their toes into near-prime and subprime waters, according to Brian Landau, automotive business leader at TransUnion, which published similar data.

“It seems that the market has been very responsive to these effects of loan performance maybe not being what it was in the past and restricting their underwriting policies appropriately in the moment in which these delinquencies were rising,” Landau said. “That is the overall story here, and I think it’s a good one.”


What Landau doesn’t mention, and what this story lacks, is a whole bunch of context: that auto loan terms are increasing to record, insane lengths of 72 months and beyond, that cars are costing record amounts, that there’s $1.2 trillion of auto loan debt outstanding, and auto loan delinquency rates remain fairly steady, especially for subprime buyers, as the Kansas City Fed found recently. And don’t leave out the prospect of an economic recession in the near future.

Yes, the majority of people need access to cars, but our system’s set up in a way that makes it exceedingly costly to own vehicles that can, for some, be extremely unreliable. Legal problems in this area of lending are going to continue to happen; a major subprime lender was dinged for a $12 million fine over misleading customers on loan terms just last week. Very positive stuff.


4th Gear: Aston Martin to Double Production by 2025

Aston Martin’s CEO is feeling pretty confident that the automaker can double its production count by 2025, having yet to see any sort of slowdown in its key markets, reports Reuters:

The British automaker, whose sports cars feature in James Bond films, is on target to produce 6,400 vehicles this year despite the pressures of slowing Chinese demand and worries over the impact of Brexit.

The company is looking to manufacture 14,000 cars by 2025 with the size of the company growing four-fold from what it was in 2014, said CEO Andy Palmer.

It will also become a very profitable company, he said.

In 2017, Aston Martin made a pre-tax profit of 87 million pounds ($111 million), its first annual pre-tax profit since 2010.


Palmer, correctly, assessed that his prospects look good, as: “The rich are getting richer, they want more personalization.”

Love to see the benefits of economic inequality. Welcome to socialism, Andy.

5th Gear: AV School Bus Axed in Florida

Last month, the U.S. National Highway Traffic Safety Administration told autonomous vehicle operator Transdev to stop operating a self-driving school bus shuttle. Whatever issues NHTSA had have apparently yet to be worked out, reports Automotive News, and so Transdev’s shuttle looks to be closed for good:

Federal safety regulators last month demanded that the community stop carrying students on an autonomous shuttle designed to look like a school bus. A cease-and-desist letter sent by NHTSA officials said using the vehicle for that purpose “puts the safety of children and others at risk.”

Since the order, the shuttle has stopped trundling along its three-block route. The demand abruptly ended a pilot that community leaders in Babcock Ranch, a planned development northeast of Fort Myers, had begun five weeks earlier as part of an effort to incorporate innovative technologies into their housing developments.


A local official said the school kids were bummed as they “enjoyed being ‘pioneers’ of this new technology.” Maybe—maybe—one day it’ll work.

Reverse: Here’s a First


Neutral: GM’s Restructuring

We knew GM had a plan in the works to restructure business in the coming weeks and months, but is there anything else you think it should be doing?

Senior Reporter, Jalopnik/Special Projects Desk



1st gear - so much politicking going to be made of GM Shutting down Oshawa, but this is just capitalism doing what capitalism does. If you blame anything else you don’t understand the system in which we live.

And for everyone who says “just get another job if you don’t like the one you have” this is a great time to reflect on just how easy it will be for ~2500 people to “just find another job” all at once.