GM confirms plans to build compact cars in US

[Coventina]

Source: Associated Press

DETROIT (AP) — General Motors Corp. said Friday that it plans to reopen a shuttered U.S. factory to build compact cars that will likely be the smallest vehicles GM has ever produced here.

The company said in a written statement that the retooled factory will be able to build 160,000 small and compact cars per year. The automaker did not say which factory would be selected to build the cars.

GM, which is expected to file for Chapter 11 bankruptcy protection Monday, also plans to announce then that it will close 14 more factories, including four assembly plants.

The automaker had said in documents submitted to Congress that it planned to produce up to 51,000 subcompacts per year in China and ship them to the U.S. starting in 2011, when GM plans to start selling the Chevrolet Spark here. The three-door hatchback with a 1.2-liter turbocharged engine is about the size of a Honda Fit or Toyota Yaris and is set to go on sale in Europe next year.



Read more: http://www.google.com/hostednews/ap/article/ALeqM5j8Uf5qEwRJ0bd4VtGFiL8PoFZWOgD98FVBH02

---

This is good news, IMHO.

[blue_onyx]

1. I hope it's a MI plant they reopen

but I won't get my hopes up.

[WriteDown]

2. Return of the Chevy Chevette?

:)

edited to change Chevelle to Chevette. Still only on one cup of coffee.

[pattmarty]

6. Nooooooo, sounds more like the Vega or Chevette, both POS's.

[WriteDown]

9. Thanks...

Still early :).

[Born Free]

45. GM had the "GEO Metro" 38city/45 hwy

A coworker drives an older (1993?) Geo metro that gets 38 city and 45 hwy according to the EPA, http://www.fueleconomy.gov/feg/findacar.htm Granted, they are nothing compared to the supersize SUV but certainly GM does own the licensed technology to make cars that are more green. The real question is will the American people be willing to trade in their huge sized vehicles for something smaller and more green or will they continue to seek the biggest road yachts they can find to satisfy their need for physical dominance on the highway. There are brave soles out there on scooters. Perhaps, some day Americans will accept we don't need to drive tanks to be safe on the highways, we just need to be more considerate and drive more carefully.


on edit: maybe this link will work:
http://www.fueleconomy.gov/feg/2008car1tablef.jsp?id=9762

[Old Coot]

7. Chevelle or Chevette? I had 2 Chevettes. They weren't bad cars for the money. nt

[WriteDown]

10. My mom had a chevette....

It was not a good time for GM :).

[Abq_Sarah]

34. I had a chevette

It wasn't the best car on the market but after I rolled it twice, hit a tree and climbed out the driver's window without any blood loss or broken bones, I'm not prepared to say it was a piece of shit.

[yellowcanine]

49. My 1976 Chevette is the main reason I haven't bought GM since.

Four timing belts. When the fourth one broke at about 90,000 miles I gave up and traded the sucker.

Front brake bleed screws rusted fast and twisted off. Result, replace whole caliper (twice).

Fan pulley fell apart and had to be replaced at about 60,000 miles.

Had to replace a rear brake backing plate, forget why, but I believe it was another frozen bolt situation.

Brakes and shocks in general on that car were a joke and there was no good way to do a front end alignment, at least so the shops told me.

No power with the crappy little 4 cylinder engine and a big heavy automatic transmission. I heard somewhere it was actually a Nova transmission - typical GM - don't bother matching components, just use what is available.

For all that lack of power, still rarely got better than 25 mpg highway. No AC either so that was not the problem.

Plastic everything inside the car. If you looked at it too long it broke.


Only good thing about the car was that it was cheap. I paid $2300 for it in 1977 and it had less than 8,000 miles on it. Practically new I thought. Little did I know. The first timing belt popped at 23,000 miles. I figured that any car company that would inflict a pos car like that on the unsuspecting public didn't deserve my business.

[yellowcanine]

50. And from what I have heard the Vega may have been worse than the Chevette.

Then there is the diesel Chevette......

And the diesel Oldsmobile......

[FiveGoodMen]

3. Only took them three decades to get started!

[YOY]

4. It's partially where the market is going.

Not in the other direction of Monster SUVs for families of 3.

[Hannah Bell]

5. gret news! "it will close 14 more factories, including four assembly plants."

[SpartanDem]

11. it beats shipping the work to another country

[Hannah Bell]

13. they're closing 14 plants, opening 1, & you think they're not shipping the work to another country.

they've already announced they'll start importing china-made autos.

from those new plants they built during the years they supposedly weren't making profits.

[Old Coot]

14. According to the article, GM will no longer import cars from China:

"But in an interview with The Associated Press on Thursday, United Auto Workers President Ron Gettelfinger said GM will not import the cars from China and had agreed as part of a concession deal to build them in the U.S."

[Hannah Bell]

15. it's not "no longer". they never *have* imported from china.

They *plan* to import them:

Report: GM to import Chinese cars; trickle in 2011 will turn to flood in 2014

The dreaded wait for Chinese-made cars to hit America's shores may end in two years.

General Motors is telling U.S. lawmakers that it plans to import cars from China starting in 2011, Automotive News reports citing a planning document circulating in Congress. GM would become the first major automaker to bring Chinese cars to the U.S. It would import 17,335 the first year, tripling that volume to 51,546 in 2014, according to the report, dated last Tuesday.

http://content.usatoday.com/communities/openroad/post/2009/05/66670925/1


That they don't intend to import the particular model to be built at that plant means bupkis.

They're closing net 13 US plants - for starters.

What is it folks don't get?

GM sold 3 million cars in the US in 2008. 1/3 were made elsewhere, & more made with parts made elsewhere.

GM is the best-selling maker in China: presumably most were made there.

SHANGHAI - January 10, 2008:

General Motors has maintained a leading position as the top selling automaker in the Chinese market for the full year of 2007, according to a report released by National Association of Passenger Manufacturers yesterday.

http://www.msnbc.msn.com/id/30793097/.

In 2008 GM sold over 1 million vehicles in China. when this deal is done, I expect they'll have more plants in China than in the US.

[izquierdista]

16. Oh joy, oh joy!

I can't wait to see these FINE Chinese vehicles. After melamine, lead paint, sulfur in the drywall, what fresh new hell can those masters of the slipshod send us now? Don't tell me -- the parts all come in a cardboard box and you assemble the vehicle yourself with plastic screws and a tube of glue.

At least they won't be clogging the roads for long. I imagine it will be a short trip from the off-loading port to the junkyard.

[Old Coot]

17. According to the article, they won't be built in China but in the U.S.

"But in an interview with The Associated Press on Thursday, United Auto Workers President Ron Gettelfinger said GM will not import the cars from China and had agreed as part of a concession deal to build them in the U.S."

[jpak]

36. I heard they were to be sold under the name "Yugo" in the US

:evilgrin:

[SpartanDem]

18. and this article refutes that

reading is fundamental

[Hannah Bell]

23. this particular make. for the time being. max 160,000 cars.

which part of "closing a net of 13 plants" don't you understand?

they're going to be importing them from somewhere. & china is where they make most of their cars outside the us.

GM sells 3 million cars in the US. 1/3 are made outside the US.

They're closing 13 facilities net, 3 assembly plants net - for starters.

Even if those 3 plants turned out half the cars the retooled one will, that = job losses & production deficit to be made up with imports - or fewer cars sold in the US.

[Psephos]

20. Your sources are old

A lot has happened since May 12.

Due to political pressure tied with their bailout to favor UAW interests, GM will now forego plans to import Chinese small cars, and instead, will retool a shuttered US plant to make a small car here instead.

GM now has the luxury of making uneconomic or money-losing plans, as long as they fulfill the political directives of the new bosses. Why? Because the new bosses will hand them more $billion$ from the US Treasury when the consequences of those political decisions show up on the balance sheet.

Meanwhile, you brought up the issue of why GM is closing a dozen or more plants in the US.

Perhaps it's because their sales are down by over 50%? Or because they're getting rid of Hummer, Saturn, Pontiac (as well as Volvo, Saab, Opel, and Vauxhall)? Or because those plants are ancient, and the sudden shift in product mix means that re-tooling and re-habbing an obsolete white elephant might be more expensive than building a new plant designed to be efficient and technologically-suited to making radically different vehicles?

US taxpayers are now $50 billion into this money hole. Last fall it was only going to be $18 billion. Wonder what it will be next fall.

[Hannah Bell]

24. "closing a net 13 plants". for starters. where do you think they'll be importing them from.

they're making 160,000 cars at the new facility. wow!

GM sells 3 million in the US.

1/3 are made outside the US, soon to be more.


http://www.google.com/hostednews/ap/article/ALeqM5jWVceuVP8Efj6GGnWU9fEb7OR1_wD98G3FEG3

The retooled factory will be able to build 160,000 cars per year, GM said. It would create 1,200 jobs, the person said, offsetting some of the 21,000 that will be lost when GM closes the 14 factories by the end of next year.


so if it takes 1200 to build 160,000 cars & the net job loss - for starters - is 19,800 people: that = 16.5 retooled plants producing a total of 2.6 million cars.

Cut it in half & you're still losing production capacity for 1.3 million cars.

Guess where they'll be made.

[Psephos]

27. They aren't selling anywhere near that amount these days

If it's lucky, GM will sell about half as many cars this year as last year - and last year was a catastrophic year.

GM has traditionally imported the small cars it can't make profitably in the US due to its disproportionate costs. Small cars are low-profit. For the past thirty years or more, GM has needed to sell vehicles with large profit margins to cover its expense load. Simple economics. Did you ever wonder why GM doesn't import any big cars or trucks? You ought to.

Meanwhile, GM has plants in Europe, South America, Latin America, Asia, and elsewhere. It's a global company. It hasn't made actual net profit in North America in fifteen years. Its global and nonautomotive businesses have subsidized North American automaking. And you're surprised they want to import cars from their global operations that would lose them money on every car sold if they were made here?

The only reason they're going to build that new small car in the US is because the car czar told them to, or no more heroin. There is exactly zero chance they will avoid losing money on that venture. But so what, Uncle Sugar will just hand them more.

By the way, what kind of car do you drive?

[Hannah Bell]

28. Wrong: "the 3 million vehicles GM sold in the U.S. last year"

http://www.msnbc.msn.com/id/30793097/

That would be less than 2 percent of the 3 million vehicles GM sold in the U.S. last year — about one-third of which already are made overseas.

http://apnews.myway.com/article/20090514/D985PEDO0.html

"Of the 3 million vehicles GM sold in the U.S. last year, it imported the Chevrolet Aveo and Pontiac G3 subcompacts from South Korea..."



I drive a second-hand Saturn.

[Psephos]

30. We apparently agree on the facts

but misunderstand each other's presentation.

So, to be clear, I do agree with you that in the US, GM sold 3 million cars last year, calendar year 2008.

My point is that GM is currently selling cars, in 2009, at roughly half that rate. Most observers expect some turn-up in sales later this year (I remain skeptical), but consensus seems to be GM will end up 2009 about a third below 2008's dismal figure.

Here is a look at GM's US sales in the 21st Century:

2001 4,904,015
2002 4,858,705 −0.9%
2003 4,756,403 −2.1%
2004 4,707,416 −1.0%
2005 4,517,730 −4.0%
2006 4,124,645 −8.7%
2007 3,866,620 −6.3%
2008 2,980,688 −22.9%


Now, here is a snapshot of GM's worldwide operations and number of employees:

(late 2008 data)

GMAP (GM Asia-Pacific) 35,000
GME (GM Europe) 56,000
GM LAAM (GM Latin America, Africa and the Middle East) 36,000
GMNA (GM North America) 123,000
GMAC (GM Acceptance Corporation - finance and insurance services) (included in GMNA)
SPO (Service, Parts and Operations) (data not available)
Other operations 2,000
Total number of employees 252,000

GM manufactures vehicles in 34 countries. It employs 252,000 people around the world, and sells and services vehicles in 140 countries. In 2008, 8,3000,000 GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling.

That's why it's an economic decision for a global company with plants around the world to import small cars into North America from a profitable manufacturing plant elsewhere. Especially when compared to making that kind that kind of car in North America at a certain loss. GMNA doesn't have any room to absorb losses.

GM's North American operations are not even the majority of the company, and the US market is mature. Asia is an exploding market, and GM has good brand acceptance there. Anyone who wants to be one of the industry leaders in coming decades will make sure it's a major player in SE Asian markets. To do that requires high-quality local product.


And - btw, I also drive a 2nd-hand Saturn. A red SL2. So we both got skin in the game.
:fistbump:

[Hannah Bell]

31. General Motors Corporation March 2009 Global Sales Call Transcript

"Good afternoon, everyone...

I think the big headline this month is that we estimate the seasonally adjusted annual rate for March is going to come in about 10 million units. This is well over what most of the analysts have thought, putting it about 9.2 million. And that's total vehicles I'm talking about, including medium and heavy...

Our retail we did 342,000 units in Q1. That was down 42%. We believe the industry was off 36% to 37%, so we did not perform as well as the industry. We're slightly higher year-over-year decrease than the industry. But I'd like to make a couple of points about it.

It's not like our performance was way out of whack of what the industry did. In fact, we estimate we had a major Japanese competitor whose retail performance was actually off more than ours in the first quarter. Ford, Nissan and Toyota were all in excess, we believe, on a retail basis off 38% or higher in the first quarter."

http://seekingalpha.com/article/129000-general-motors-corporation-march-2009-global-sales-call-transcript.

[Hannah Bell]

29. as for their profit picture: read their annual reports. what you read in the paper is bullshit.

I posted this last year, from 2007 annual report: IN WHICH YEAR THEY MADE A PROFIT ($553 million) ON THEIR AUTO MFG, but lost money on GMAC mortgage loans & took a "special charge" of $38 billion in stored-up tax credits) to produce a loss.

Income = $178 billion.

TOTAL LABOR, BENEFITS, PENSIONS (including non-manufacturing such as marketing) = 53 billion, 13 billion of which = ADMINISTRATIVE (7.3% of revenues).




GM needs bailout, workers need to sacrifice? Read their annual report.
Posted by Hannah Bell in General Discussion
Thu Dec 04th 2008, 02:01 PM


P. 6: GM's core automotive business generated 178 billion in 2007, an improvement of 7 bill over 2006.

"Adjusted" automotive earnings (profit) = 553 million.

Total adjusted net loss (excluding "special items") = 23 million, "reflecting a 1.1 billion loss attributed to our 49% stake in GMAC". I.e. the loss comes from their finance dept., specifically mortgage loans - p. 7 - NOT their auto division.


p. 7:

With "special items", the corp lost 38.7 billion: "almost entirely attributable to the non-cash 38.3 billion special charge in the 3rd quarter related a non-cash valuation allowance against deferred tax assets. The valuation has no impact on cash and does not reflect...long-term financial outlook".

My read: scam whereby they're allowed to book pseudo loss (stored up tax credits) to short the taxman.

Now running at 9 billion less in structural costs than 2005-06.

Pension funds "20% overfunded" - don't expect to have to make any contributions to pension funds in the forseeable future.

Salaried retiree healthcare "capped", hourly healthcare now paid from "independent trust", resulting in savings in future of 6 billion/yr.


p. 8:

Sold more than 9 million cars, 4th time in GM history. GM Europe fastest-growing car corp there, up 9%; #1 in China, Latin america up 19%. 59% of GM sales now outside US.


p. 11:

Will reduce US costs 5 billion more by 2011, continue growth overseAs, forecast half of sales by 2017.

p. 47:

"in 2007, the automotive industry continued to show strong sales & revenue growth," sales growth of 19% 2003-2007, revenue growth = 7%/yr, 9.4 vehicles sold 2007 v. 9.1 2004.

GM share grew in all markets EXCEPT GM North America. What a coincidence. They're booming everywhere else, but just can't get it together in the US.


p. 52:

(Dollars in billions) 2007, 2006, 2005

Automotive net sales and revenues $178, $171, $159

Contribution costs (a) $124, $119, $110

Structural costs (b) $53, $51 $55

Impairment, restructuring and other charges (c) $2 $7 $5

(a) Contribution costs are expenses that we consider to be variable with production. The amount
of contribution costs included in Automotive cost of sales was $123 billion, $118 billion and
$109 billion in 2007, 2006 and 2005, respectively, and those costs were comprised of material
cost, freight and policy and warranty expenses. The amount of contribution costs classified
in Selling, general and administrative expenses was $1 billion in 2007, 2006 and 2005 and
these costs were incurred primarily in connection with our dealer advertising programs.

(b) Structural costs are expenses that do not generally vary with production and are recorded in
both Automotive cost of sales and Selling, general and administrative expense. Such costs
include manufacturing labor, pension and other postretirement employee benefits (OPEB)
costs, engineering expense and marketing related costs. Certain costs related to restructuring
and impairments that are included in Automotive cost of sales are also excluded from structural
costs. The amount of structural costs included in Automotive cost of sales was $40 billion,
$39 billion and $44 billion in 2007, 2006 and 2005, respectively, and the amount of structural
costs included in Selling, general and administrative expense was $13 billion, $12 billion
and $11 billion in 2007, 2006 and 2005, respectively.

(c) Impairment, restructuring and other charges are included in Automotive cost of sales.


TOTAL LABOR, BENEFITS, PENSIONS (including non-manufacturing such as marketing) = 53 billion, 13 billion of which = ADMINISTRATIVE (7.3% of revenues). Production labor/retirees = approx 22% of revenues.


p. 68

7 billion spent on "property"
10 billion spent on securities & acquisitions


p. 69: credit

"We also have a $4.6 billion standby revolving credit facility with a syndicate of
banks, of which $150 million terminates in June 2008 and $4.5 billion terminates
in July 2011."

So they need gov't $$$$ - WHY?


p. 71:

Health plan (OPEB) underfunded by 43 billion. (How does this happen?)


p.

LABOR FORCE
On a worldwide basis, we have a concentration of our workforce working
under the guidelines of unionized collective bargaining agreements. The current
International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America (UAW) labor contract is effective for a four-year term which
began in October 2007 and expires in September 2011.

Our current contract established a new wage and benefit structure for entry-level employees hired
after the effective date of the contract in certain non-core positions, such as
material movement, kitting and sequencing functions and certain stamping and
subassemblies positions. These employees will receive base wages of approximately
$15 per hour and will have a higher cost sharing arrangement for health
care benefits.

Additionally, the contract includes a $3,000 lump sum payment
in 2007 and performance bonuses of 3%, 4% and 3% of wages in 2008, 2009
and 2010, respectively, for each UAW employee. We amortize these payments
over the 12-month period following the respective payment dates. Active UAW
employees and current retirees and surviving spouses were also granted pension
benefit increases. Refer to Note 15.

Our previous UAW labor contract was effective for a four year term which
began in October 2003 and expired in September 2007. This contract provided
for a $3,000 lump sum payment for each UAW employee which was paid in
October 2003, and a 3% performance bonus for each UAW employee, which was
paid in October 2004. We amortized these payments over the 12-month period
following the respective payment dates.

UAW employees received a gross wage increase of 2% in 2005. For 2006, these employees were also granted a 3% gross wage increase under the labor contract, which was subsequently agreed
between us and the UAW to be contributed to a Mitigation Voluntary Employee
Beneficiary Association (VEBA) as a wage deferral, in connection with the 2005
UAW Health Care Settlement Agreement. Refer to Note 15. Active UAW employees
were also granted pension benefit increases. There were no pension benefit
increases granted to current retirees and surviving spouses. However, the contract
did provide for four lump sum payments and two vehicle discount vouchers for current retirees and surviving spouses.


p. 130

lists over 50 bigwigs, ceos, division heads, etc.

The top 5 bigwigs took home over 10 million in straight salary 2007. How much do 50 bigwigs get?

Doesn't say.


http://www.gm.com/corporate/investor_infor...

http://journals.democraticunderground.com/Hannah%20Bell/56

[mountainvue]

53. Volvo is owned by Ford. n/t

[Torn_Scorned_Ignored]

8. Damn!

[alfredo]

12. Let's hope it is competitive.

[ddiver]

19. They will make the fatal flaw they always do...they will under-power it.

Americans will buy smaller cars if they have decent pickup and can merge and pass on the freeways. Smaller cars have the benefit of lower chassis weight, don't blow it with a hamster driven drivetrain.

[Psephos]

21. Can't get great gas mileage that way

and it looks like Government Motors is now going to be telling the customer what they want, not vice versa.

Shouldn't be hard to guess how that will work out.

[ddiver]

22. 70's and 80's VW Rabbit, VW Fox, and Ford Fiesta say otherwise.

If it could be done 30 years ago it can be done again.

[Psephos]

25. As a 1979 VW Diesel Rabbit owner, I agree with you personally

However, it's not you or me they have to worry about.

There's a reason they called them econoboxes back then. There are millions upon millions of people who cannot or will not buy a car like that because it doesn't meet their family or business needs. Meanwhile, in the intervening decades, emissions standards have gotten drastically more stringent, and crashworthiness has become a major concern. Much as I loved my Rabbit, it could not be sold these days.

Engineering is the art of making trade-offs. In the case of small car design, you have three major engineering foci that are mutually destructive:

1. High gas mileage

2. Low emissions

3. Performance

Maximizing any one of these requires compromising the others. Because of the laws of thermodynamics, and the physical restrictions of volumetric efficiency, you can't maximize them all. So take your pick, but your pick is not likely to be everyone else's pick. As long as we don't have a Soviet-style economy, people are going to buy what *they* want, not what someone else wants. Trying to force choice by fiat (no pun intended) has a long history of producing unintended consequences and unforeseen workarounds...and bankrupt companies.

[yellowcanine]

51. Turbo diesel is the way to go. Europeons know how to do it. I drove a diesel VW in Spain a couple

of months ago and I swear the only time I was aware that it was diesel was when I fueled up.

[tabasco]

26. If the dumb fucks has listened to Carter, they would be doing fine.

They had to go bankrupt and dragged kicking and screaming to make an economical vehicle.

Idiots. Just like the morons who buy a 300 hp car in a country where the speed limit is 70 mph. Morons.

Sounds good revving at the red light, though. Stupid fucks.

[CRF450]

32. Some of those 300hp cars get decent fuel milage...

Mine has a 350hp v8, averages 23mpg, and has gotten 31mpg on the highway. Call me a dumb fuck all you want, I buy what appeals to me.

[NickB79]

38. 23 mpg is decent fuel mileage?

[CRF450]

39. What do you think most cars other than econo/hybrid cars get on average?

Not any better than what I'm getting. And if you think for a moment, look at what midsize to fullsize cars, luxury and performance cars from the import makers get. Not any better than what my average fuel mileage is.

[NickB79]

44. Precisely. And that is why I think the vast majority of cars get crappy fuel economy

[tabasco]

40. My 100 hp car goes 70 mph just fine.

And gets twice the mileage of your gas hog.

>>"I buy what appeals to me.<<

I buy the best machine to get the job done.

[WriteDown]

41. How did you modify your

riding mower to go 70mph? :rofl:

[CRF450]

43. My dirtbike gets similar gas mileage to a Civic.

Crazy aint it? Only tops out at 85mph but will take off just as fast my Trans Am.

[lutefisk]

46. My last bike got 25 mpg on the highway, iirc.

Of course it had six carburetors, which might explain the mpg.

:shrug:

[CRF450]

47. Six carbs?? What bike was it?

[lutefisk]

48. 1982 Honda CBX. Six cylinders, six carburetors

One of Honda's best, imho.

[CRF450]

42. Mine gets the job done too just like any other vehicle.

Only its more fun to drive than a Prius or whatever similar car to it. Not everyone's gonna drive what works for you, people's taste in a car is different.

[Telly Savalas]

33. The Spark looks like a cool little car.

http://www.chevrolet.com/future-vehicles/spark/

[Abq_Sarah]

35. That is cute

If they actually got around to paving the roads in my state, I'd probably consider one.

[steven johnson]

37. Possibly SUV psychosis has passed

We need more fuel efficient cars!

[mountainvue]

52. Wasn't this their business plan like 30 years ago?

Just sayin'.