GM plans to axe plants; Chevy Volt, Impala, Cadillac XTS, Buick LaCrosse on chopping block

November 26, 2018

General Motors announced Monday significant changes in North American car production including the discontinuation of several models and the closure of three assembly plants in the U.S. and Canada. The company said that it will discontinue the Chevrolet Cruze, Impala, and Volt and Buick LaCrosse during 2019. The Cadillac XTS and CT6 sedans may also be dropped next year.

The three plants slated for closure during 2019 include one in Lordstown, Ohio, one in Detroit-Hamtramck, Michigan, and another in Oshawa, Ontario, Canada. Two additional GM facilities—one near Baltimore and another in Michigan—that build transmissions and components for electrified cars will also be shuttered.

Sources who were not authorized to discuss production changes hinted at the changes last month. An official at GM in October confirmed that some employees have been prepped for a significant announcement, but were not given details.

Like crosstown rivals Ford and Fiat Chrysler Automobiles, GM will pare down the number of small cars available in North America dramatically. Its electric-car strategy also may be in flux: It’s unclear if the current Bolt EV could live on as a Chevrolet, as a Cadillac, or as a semi-autonomous vehicle, which would represent a considerable shift in philosophy for the company. GM has promised it will build and sell 20 electric vehicles in various global markets by 2023.

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The Chevrolet Impala and Cadillac XTS—cars made in GM’s aging and shrinking Oshawa, Ontario, plant—would be likely to fall victim to the move toward crossovers and trucks first.

Production at the Canadian plant had been slowly declining in recent years as GM moved the Camaro to Michigan, and Impala and XTS sales have dwindled along with sales of other large sedans. A second Oshawa facility produces the last-generation Chevy Silverado, although that’s likely to end in less than a year as GM ramps up production of its new-generation Silverado and GMC Sierra trucks at other plants in the U.S. and Mexico.

2019 Chevrolet Cruze

2019 Chevrolet Cruze

The Chevy Cruze, whose sales have collapsed from more than 273,000 in 2014 to just over 100,000 in the first 9 months of this year, will also be dropped. The Lordstown plant, near Warren, Ohio, where the Cruze is produced has slowed to just one shift as sales have slumped.

GM also said that it will shutter two additional plants outside North America by the end of 2019, but the automaker did not say what facilities will be closed.

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The backdrop for the large announcement is looming negotiations with union workers at GM plants. Although GM has posted profits in prior years since the last negotiations with the UAW in 2016, GM CEO Mary Barra has publicly said that the automaker would need to adapt to a slowdown in auto sales from record highs in 2016 and 2017. The company reported negative cash flow for the first nine months of this year. Contract negotiations with the UAW are slated to begin next summer.

Stock in General Motors has slipped more than 20 percent in the last year, and investors may be looking for ways to capitalize on surging crossover and truck sales and shed low-margin sedans and small cars.

Internet Brands Automotive reporters Aaron Cole, Joel Feder, and Marty Padgett contributed to this report.

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