GM Follows Ford, Slashes Auto Production

GM is cutting back production:

General Motors said Monday that it planned to idle five factories in North America and cut several thousand blue-collar and salaried jobs in a bid to trim costs. The action follows similar job-cutting moves by Ford Motor in the face of slowing sales and a shift in consumer tastes, driven in part by low gasoline prices.

….The plants include three car factories: one in Lordstown, Ohio, that makes the Chevrolet Cruze compact; the Detroit-Hamtramck plant, where the Chevrolet Volt, Buick LaCrosse and Cadillac CT6 are produced; and its plant in Oshawa, Ontario, which makes the Chevrolet Impala. In addition, transmission plants in the Baltimore area and in Warren, Mich., are to halt operations.

Part of this is due to Trump’s steel tariffs, which have raised the price of cars and trucks, but mostly it’s due to changing tastes brought about by a big drop in gasoline prices in 2015:

As you can see, domestic auto sales were doing OK up through mid-2014. Then, over the next 18 months, gasoline prices plunged from $3.70 to $2.20 and Americans did what they always do: abandoned gas-friendly autos and went on an SUV binge. Today, trucks and SUVs outsell cars by more than 2 to 1, which is why auto plants are being closed. At the same time, total vehicle sales aren’t exactly on fire either:

The average sales level has dropped by about a million units since 2015. This isn’t disastrous, but it’s hardly what you’d expect in a booming economy, either. The result is plant closures and, before long, the end of virtually all domestically produced cars. The next time gasoline prices rise—and they will, someday—American car companies will have nothing but big piles of unwanted, gas-guzzling SUVs that nobody wants.


Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

payment methods

We Recommend