GM’s Plant Closures Might Have Broken Its Union Deal

Mary Barra shows off the Cruze in 2016. Photo: Getty Images
Mary Barra shows off the Cruze in 2016. Photo: Getty Images
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Trump’s tweeting into the void, General Motors is pulling new words out of a hat, and a mainstream automaker just dissed Tesla again. All that and more in The Morning Shift of Monday, Dec. 3, 2018.


1st Gear: GM Dug Up New Word For Plant Closures To Sneak Past Union

GM has been saying that it wanted to close its plants while the going was good, but why now, and why so abrupt with it? Hm. Oh right, union negotiations are coming right up.

GM and the UAW ratified a four-year contract in 2015, and the negotiations have been anticipated for quite some time. This all comes up in a particularly interesting light, because by the looks of things, GM had a pretty good idea that its announcement to close plants could even break its existing contract, as the Detroit News explains:

GM was careful last week in its restructuring announcement when it addressed the affected plants, coining a new term: “unallocated.”

The reason: to avoid the words “idle” or “close,” which are explicitly addressed in the 2015 agreement between GM and the UAW. The “Plant Closing and Sale Moratorium,” outlined on page 356 of the agreement, states that GM will not will not close or idle “in any form, any plant, asset, or business unit of any type” outside of collective bargaining, with a caveat for extreme market conditions or an “act of God.”

I guess the question is if slumping sedan sales and an expected but not-yet-experienced economic slowdown in the future are enough to make up a real crisis, or if the problem is more mundane. If the market has screwed GM and it has to close plants or die, that’s one thing.

If GM has just been slowly wasting away its market position on poor car choices, is that really a crisis or just business as usual? These are fun thoughts that GM and the UAW will be hashing out over the coming year.


The problem is that GM has put the UAW in a uniquely hard place, in that the cars that the UAW would be arguing to save aren’t exactly paragons of virtue. Nobody is going to want to go to bat for the Cruze. They will, however, probably argue to retool plants to save jobs.

2nd Gear: Trump Tweets China Will Remove Car Tariffs; China Not Commenting

Last night President Donald Trump fired off an unexplained tweet of epic proportions, even for him. Deep into the evening he claimed that China is going to drop its tariffs on cars coming into the country, promising peace in our time, trade war-wise:


The follow up to the tweet is, uh, well there’s not a ton going on, as Automotive News reports:

Trump gave no other details in his late-night tweet, which came shortly after he agreed with Xi to a truce in the trade war during a meeting at the Group of 20 summit in Argentina. In a briefing in Beijing a few hours later, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes.


Cool. Glad this is all going smoothly.

If this is all true, the big winners would be German automakers with export-oriented plants in the U.S., and as such BMW shares are up this morning.


3rd Gear: No-one Is Tested Like A Fan Of A GM Nameplate

Please enjoy this story about possibly the most kicked and tormented die-hards in the car world, Chevy Impala fans, detailed in the Detroit News’ profile: “Impala enthusiasts sad legendary car slashed from GM lineup.”


I’ll pull a little excerpt:

His uncles, Richard and Robert Lisiecki, have worked at the Hamtramck plant for 42 years, alongside all of Robert’s children. Gersch said news of the impending plant shutdown devastated the family.

“Losing the Impala is heartbreaking and such a shame, but we’d rather lose that than lose GM,” Gersch said. “It’s breaking the family apart and they all have to look for work elsewhere.”


This is all just such a stark exhibition of the Stockholm Syndrome effect that GM has on people. We all believe in its inability to do anything but plow along and fail through the years.

4th Gear: Even Honda’s Sales Are Down

This past week, one of the big stories was that the faltering sales of sedans in the U.S. was hitting American brands much more than Japanese ones. My colleagues argued this was a brand perception issue: Americans just can’t stomach buying American sedans, having been burned from decades of poor quality. I myself believe it’s a problem of, say, the Cruze looking about as attractive as a broken window.


In any case, the point is getting a little moot, as even sales at the beloved sedan-er Honda are down, as Reuters reports:

Japan’s Honda Motor Co Ltd on Monday reported a 9.5 percent fall in U.S. auto sales in November, hurt by lower sales of passenger cars such as the Civic.


The new Accord, which is good, is also very down this year.

Maybe the age of the sedan really is coming to a close. Maybe that’s not a bad thing?


5th Gear: Bentley Claims EV Tech Just Isn’t Special Enough

Today we got a good reminder of how oblivious established carmakers can be when it comes to the world of EVs. Tesla is having no trouble coming up with ultra-desirable electric sedans and crossovers at the moment (where it’s having trouble is building and selling them at a profit), but luxury sedan and crossover marque Bentley isn’t convinced the tech is there. CEO Adrian Hallmark said as much in an Automotive News Europe report published today:

“The problem is when you get to our segment with the size of our vehicles and the frontal area we push through, current battery power density limits the size of the car you can offer with credible driving range,” Hallmark said.

Battery technology will not improve to a level that would be suitable for a pure electric Bentley until 2023 to 2025, said Hallmark, who joined Bentley six months ago from Jaguar Land Rover.

“There is nothing industrialized in the supply chain before then,” he told Automotive News Europe.


Wow, really, nothing huh. Wonder where all those Model X buyers are getting their stuff from.

Reverse: Speaking Of American Car Companies Having Trouble Taking On Imports


Neutral: Who Failed Whom In This GM Crisis?

Maybe it was the American people, for not loving the Cruze enough. Maybe it was the UAW for not pressuring GM to get its shit together. Maybe, and this is going to sound crazy, it was GM for, uh, making boring cars that didn’t make it money.


What’s your take?

Raphael Orlove is features editor for Jalopnik.



Everyone failed.

GM failed when they decided to make complete and utter crap from the mid 70s to the mid 90s. They figured “we are so big, we set the market, we can build whatever we want to and everyone will have to copy us.”

The Unions failed in the mid 70s to mid 90s when they had problems with intentionally making the crappy designs even crappier. Also, by demanding no lay offs and no automation, they slowed down GM’s non-response to new technology.

The American people failed when they didn’t try out GMs once GM and their union got their crap together. (I’m as guilty as any of them with all the Mahk jokes.) Most mid-00s GM sedan is as durable as most mid-00s foreign cars. (as someone joked here, a GM car will run crappy longer than most cars will run period).

The politicians failed between keeping the chicken tax and making SUVs/Trucks CAFE friendly. This encouraged GM to go to trucks and SUVs and to avoid putting money into the development of cars. GM doesn’t need 900 factories to make just SUVs/Trucks.

The local towns failed by refusing to change with the times. The days of a factory with 20,000+ employees are over, cities need to attract/keep all sorts of businesses. A city I used to live in was a single industry city for decades and became a ghost town when that industry slowed down. Now they spend more time (and money) trying to attract new industries than keeping the one the town was built on. In places like Pontiac when the factory closes, there are no options for the employees.