GM is probably the poster child for plant closures in the States and outsourcing production, at least for someone in my generation. It’s weird, then, to see GM talking up the prestige, quality, and profitability of making cars here. All that and more in The Morning Shift for March 22, 2022.
1st Gear: Lyriq Production Begins, And GM Is Talking About Making 200,000 Per Year
Lyriq production has begun in Spring Hill, TN, as GM announced on Monday. GM didn’t exactly say how many of these things have rolled off the line, a question I wouldn’t normally ask, but this is GM, a company that made one (1) Hummer EV last year.
There’s no real indication that GM wants to be making 200,000 of these luxury EV crossovers annually, or that GM has the wherewithal to source enough raw materials to get them out the door.
Its factory, though, currently making gas-powered luxury crossovers, could do the deed, as Automotive News reports:
Cadillac could build nearly 200,000 Lyriq electric crossovers annually depending on customer demand, executives said Monday before the first 2023 Lyriq rolled off the production line at Spring Hill Assembly.
The plant in Tennessee can support output of just under 200,000 vehicles per year. Today, the Cadillac XT5 and XT6 and the GMC Acadia internal combustion crossovers are also built there. They will be built alongside the Lyriq for now.
“We have a progressive ramp-up, but we have the ability to flex based upon customer demand,” said Rory Harvey, vice president of global Cadillac. “And customer demand for the Lyriq is absolutely huge.”
GM’s American production really seems to be supporting the company right now. During the pandemic, GM pared down its production to focus on its highest profit margin vehicles, primarily trucks, primarily made in the States. Now its prestige stuff is also made here.
2nd Gear: GM To Export Made-In-USA Cars To China
The other component of GM’s recent MUSA pride is that it’ll be exporting high-quality stuff to China, the world’s largest car market both in general and for EVs specifically.
Because this is GM and nothing can be done without added complexity, this work will be handled not by an existing section of GM bureaucracy but by a new startup within the company. Here are the details, as the Detroit News explains:
[Detroit automaker’s China president, Julian] Blissett said the business will focus on selling higher-end vehicles currently unavailable in the country, Reuters reported.
On Monday, GM President Mark Reuss told CNBC the vehicles included will be both electric and internal combustion engine models.
GM did not reveal any other details on when the business will launch and what vehicles will be imported to China.
GM did not export any vehicles to China from the U.S. in 2021.
I’m amazed that GM didn’t export anything to China last year and got by entirely through domestic production, but that’s probably a vision of what’s to come. All of GM’s expertise here eventually gets exported.
3rd Gear: None Of The Environmental Complaints Stopped The Tesla Germany Factory
Speaking of American car companies and overseas production, Tesla’s factory outside Berlin is up and running, even after a sustained campaign by locals to point out all of the environmental questions involved in slamming a factory down in the middle of their forest. From Bloomberg:
The leading electric-vehicle maker officially opens its assembly plant outside Berlin on Tuesday, Tesla’s first carmaking plant in Europe. Chief Executive Officer Elon Musk and German Chancellor Olaf Scholz are both set to attend the official start of production at the 5 billion-euro ($5.5 billion) facility.
[...]
Although Tesla moved quickly to construct the facility, it was beset by months-long permitting delays that at times exasperated the world’s richest person.Concerns at the site centered around its environmental impact, with activists opposing tree-clearing and the effects the facility would have on wildlife and water supply. The latter issue could linger and factor into Musk’s expansion plans, with the local water authority warning last week that further development won’t be possible without additional extraction permits.
Tesla has big “think locally, act globally” mindset, I have to say.
4th Gear: Renault Reopens Moscow Plant
The automotive industry took one look at the invasion of Ukraine and and just froze solid, like in a Tom and Jerry cartoon or something. Anyway, nearly a month in, things are already starting to thaw, as Reuters reports:
Renault resumed production at its Moscow plant on Monday, a company spokesperson told Reuters.
The French automaker suspended operations at the plant in late February, saying at the time it was due to a “forced change in existing logistic routes.”
The Moscow plant builds the Renault Duster, Kaptur and Arkana models, and the Nissan Terrano.
5th Gear: Worker Strike Wins With Canadian Pacific Railway
Some 3,000 people once again have a contract after a mere two days on strike, as Bloomberg reports:
Canadian Pacific Railway Ltd. said it will resume normal operations after it agreed to work with an arbitrator on a contract for 3,000 workers, ending a two-day work stoppage.
“This agreement enables us to return to work effective noon Tuesday local time to resume our essential services for our customers and the North American supply chain,” Chief Executive Officer Keith Creel said in a statement early Tuesday.
You really don’t want to see a rail line stopped, and I’m glad the railroad management came to its senses.
Reverse: Speaking Of Hummers
Neutral: How Long Until GM Disappoints Us?
How long do we think this moment will last before the rhetoric changes from MUSA expertise to overseas production efficiency, or however else the inevitable outsourcing will be pitched? This is GM we’re talking about, after all.