Hounded by overcapacity. But other automakers do just fine with cars.
Starting in mid-November and going through the rest of the year, General Motors will close its Detroit-Hamtramck assembly plant – its only remaining factory in its hometown – and lay off about 1,500 workers, “people familiar with the plan” told the Wall Street Journal. When the plant does resume production, output will be cut by 20%, and 200 people will be out of a job.
Back in 1999, the plant produced over 200,000 Cadillacs and Buicks a year. This year, it might barely produce 80,000 vehicles.
The Detroit-Hamtramck plant has already been subject to temporary layoffs earlier this year when an evening work shift was eliminated – part of the 10,000 layoffs that were announced last December.
In July, the plant cropped up in discussions between the UAW and GM. At the time, six passenger car models were “under review” at GM. And there was talk that they might get cancelled after the 2020 model year. The models: Chevrolet Volt (the hybrid, not the Bolt, an EV), Buick LaCrosse, Cadillac CT6 (the brand’s new luxury flagship sedan), Cadillac XTS, Chevrolet Impala, and Chevrolet Sonic.
The Detroit-Hamtramck plant makes some of these slow-selling cars, including the Volt, the Buick LaCrosse – dealers are sitting on 10 months’ supply! – and the Cadillac CT6.
GM car sales are getting clobbered not only by a change in consumer preference for SUVs and compact SUVs (crossovers), but also by its competitors. GM cars sales have plunged 18.4% year-to-date, while car sales of the rest of the industry without GM have dropped “only” 9.4%. GM’s car sales are getting crushed at nearly twice the rate of the rest of the industry!
But not all automakers suffer from the dying-car-sales syndrome. A few other manufactures are making cars whose sales are booming. These cars appeal to consumers and can compete just fine with crossovers. The largest one of these automakers is Subaru, whose car sales have shot up 9% so far this year, to nearly a quarter million units.
And Honda, in third position in car sales so far this year, behind Toyota and GM, has seen only a 2.5% decline in its car sales, compared to GM’s 18.4% plunge. So blaming the fickle consumer, as GM likes to do, for its dying-car-sales syndrome isn’t quite the right answer.
To deal with its dying-car-sales syndrome, GM has been cutting production and has been laying off people. But even its crossover production took a hit. On September 22, it sent a notice to employees at its Spring Hill, Tenn., assembly plant that makes the GMC Acadia and Cadillac XT5 crossovers – among the very vehicles GM is counting on as the engine for sales growth.
GM told employees that it would eliminate the entire third shift due to “moderating” sales. About 1,000 workers would be cut. These cuts wouldn’t be a temporary layoff for a few weeks, as there was no indication that the shift would be brought back in the near future. “We believe the best way to react…is to reduce output,” the statement said.
Of GM’s 17 assembly plants in North America, too many are focused on building cars. But GM’s cars have failed to inspire American consumers in recent years, even as Subaru and some others are making headway. Looking at production cuts is the obvious and immediate solution for GM. But making cars that appeal to a larger number of consumers in the US, and marketing them successfully, is a much tougher job that GM doesn’t seem to be able to tackle.
Hurricane Harvey and the highest discounts in US history did the trick, and September was finally the month everyone had been waiting for. Read… Which Automakers Got Crushed, Which Boomed?
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GM’s laying off again .. Ford’s moving even more production south of the border / overseas … FCA is currently FSBO .. Harley Davidson’s cutting back production ever further … etc – et al . And this just the transportation sector !
Yeah … this whole ” Make America Great Again ” thing is working out real well so far … for someone .. too bad its not us ( US )
…. and errr …. ironic aint it as GM continues to try an market its macho image …. while Subaru emphasizes the ‘ Nice Guy/Gal Subaru owner as well as intentionally marketing to the LGBTQ alphabet soup , environmentally concerned , families and ” Leave No Trace Behind ” outdoors folks .. its Subaru thats coming out on top …
Hmm … could it be that Subaru has a better handle on the changing face of America than GM ? Hmmmm…
In the United States:
How many F series trucks did Ford sell in 2016?
How many Silverado series trucks did GM sell in 2016? (not the GMC line)
How many Subarus, all makes, were sold in 2016?
This article points out the decline in GM passenger sedans, not vehicle sales overall.
It would require a little concentration and logic on TJ’s part to deduce what you wrote. GM & Ford sell (big) TRUCKS, plain and simple. Tahoe, Suburban, Yukon, Silverado, F150, you name it.
Subaru sells LESS THAN ONE HANDFUL of car models. Yes, LESS THAN ONE HANDFUL. Buick alone has the number of car models Subaru does. Subaru has hot crossovers which are king right now. The author should have pointed this out, instead of insinuating that GM is ~\going under/~ because their cars (NOT SUVs) aren’t selling.
This article doesn’t mention SUVs, crossovers, pickup trucks.
This was an article focused on GM cars and GM layoffs.
Total vehicle sales, including trucks and SUVs, for September and YTD were covered a few days ago here:
https://wolfstreet.com/2017/10/03/which-automakers-got-crushed-and-which-boomed/
Two years ago I bought a Subaru. I don’t think it had anything to do with marketing. I had to get a car fast. (My Camry was one of those with the surge malfunction. It committed suicide against a concrete retaining wall.) I looked up compact cars in Consumer Reports and the Impreza was highly recommended. Test drove, liked it and bought it.
Okay, I am a lesbian. But what I really am is a woman with no knowledge about anything mechanical. If Consumer Reports says “buy it” I do. Maybe that’s the story behind Subaru’s good sales figures.
You make me laugh–What does being “A LESBIAN” have to do
with buying a car???????????? I know a bunch of rug munchers that ride and repair there own Harleys.. Your a joke–
Subaru launched an ad campaign focused on lesbian customers. Not many advertisers do. That’s what Mary was referring to.
there is a certain reply that should have not passed the review function.
being a former 1991 subaru legacy owner, i owned it because it was a great car, mechanically reliable. i ran it into the ground at 204,000 miles, because it was essentially a pick-up truck, lasted 25 years.
seems to me that, every time i go past a car dealer, there’s a lot of cars on the lot. and here comes 2018……model-wise, already here. the last 2 years, in canada, i’ve seen 7 & 8 year loans offered.
anyway, gm, debt light, is in pretty good shape. if they want to maintain profitability, they do what they gotta do, though little consolation to those laid off, or hours cut back.
Subaru is a far superior vehicle, in terms of build, reliability & usability. GM turned out junk for years until alternatives arrived. Then customers compared and chose Subaru. The days of “any color so long as it’s black” are over. The sheep are getting picky.
It is a direct result of deficit spending, in my opinion. If the foreigners finance the deficit they have to earn those dollars by selling us stuff. If the US consumes more than it
Treasury securities trade just like money, so they are a money equivalent. When debt expands, so does the amount of money. The dollar does not get devalued in proportion to the new emission of debt. Arbitrage with foreign goods is profitable since the dollar stays strong. Deficits drive jobs overseas in fungible industries.
Industries (medical, education, et) that don’t have to compete with the foreigners have higher inflation rates. Fungible industries have to compete and inflation is suppressed with the cheaper foreign labor content.
After the Crooked GM Bankruptcy/Obama bailout of the unions/Destruction of 200 years of contact law…
I will never buy another GM vehicle (new or used) again.
I have to wonder – how many others feel the same.
I know I never will for that and other reasons The last GM car I owned was a SS 396 Camero back in the early 70s
Auto production is a capital-intensive industry, and labor accounts for ten percent or less of a car’s production costs.
You don’t know what you’re talking about.
In light of Mr De Guise’s response albeit on a kinder more civil note may I remind you that it was GWB’s administration that instituted GM’s ( the UAW received bupkis in the deal ) bailout along with the banks etc
My last GM car was a 1968.
I certainly do, and the same applies to CRAPCO, aka FCA. Gubment Motors uses the cheapest materials possible and its products are rolling wrecks. I’d rather walk than be seen in an Obama Motors vehicle from either of its two divisions.
Ya because Obama was the only president to bail out the auto industry.
I still have that $300 check Bush sent me to help prop up the consumer economy–its burning a hole in my pocket
This sucker could go DOWN!
When my wife and I drove by this plant in Detroit last October on our vacation it amazed me the amount of cars just sitting waiting for shipment in the rail yard. Thousands of them. I knew then from reading your pages Wolf trouble was brewing. Inventory was at record highs back then and still is for most models. Still driving around here in the Baltimore area every G M dealer let alone all others have the very same problem. Inventory glut. College students are refusing to drive being saddled with so much college debt. They are moving into cities with mass transit options. The sooner auto mfgs realize this the better. The sub prime market has been tapped out
Not only mass transit but Uber and Lyft. The millennials seem to have no desire to live in the suburbs. I have (let me count…) 8 millennial nieces and nephews (and their respective spouses/partners) and there is a grand total of 2 cars amongst the lot of them.
I guess the beautiful theory is that they will all move to the ‘burbs when they get married and have kids… we’ll see. It’s beyond dispute that they are marrying and having kids later, so their lifetime automobile purchases will decline accordingly.
The pattern developing in England among better-paid Millenials is groceries – in fact everything! – ordered online and very low car use indeed. Here, the health-conscious like to cycle.
I buy all bulk that way now, and just choose fresh veg and meat personally at a shop.
I would say that clothing is best placed to retain real off-the- street customers; but, equally, as I am a standard-size- makes-a-perfect fit male, I can order clothes, shoes, etc from the very best London (St Jame’s) retailers, and get them next day, buying in the regular sales (unceasing these days with excellent discounts, and not ‘special buy’ sale crap).
I do however try to support small local shops with friendly faces, which is part of being human after all. Life would be bleak without them.
And, in that sea of unsold vehicles, you must have noticed the 80-90% preponderance of either (1) black, (2) white, (3) gray, (4) silver paint tones, (5) red/reddish. Two tones of black and silver DO NOT count as four colors!! Go to a vehicle web site and look at your ‘choices.’ This is so glaring that in simple 3-minute traffic observations, you find that a majority of vehicle colors that are outside of this narrow range prove to be cars that are 10+ years old. These bean counters have been hard at work for nearly a decade trying their very best to squeeze ‘our’ preferences into ‘their accounting targets. If you haven’t noticed this creep, the auto makers are very pleased with you, and, with themselves. Emotion still sells, anything!!! This creep is one of the most depressing signs I’ve seen in my life of corporations making decisions that ultimately prove that their goal is to push the crap on us that they want us to drive (eat, drink, wear, etc.), rather than ever giving a damn about what we really want. I drive a car that is not in that group of five I mentioned. I will refuse any attempt on my next purchase when I’m being led to the lot for a choice that maintains their dismal trend. I won’t tell them why I’m not buying because they aren’t listening anyway. I distinctly recall Honda doing this in the mid-80’s with 3 colors for Honda Accord coupes, red, blue & silver, for the purpose of controlling financial aspects of production until a particular point of profitability was reached. It’s starting to look like a scene from some futuristic update of 1984, at least when it comes to this sneaky alteration in visual preferences.
Doesn’t GM own most or all of the American car manufacturers?
Our repair center has been getting busy. People repairing their current autos rather than buying new ones. Nobody has any money.
No bail out this time around.
Plenty of people have plenty of money in the good ol’ USA.. It’s the middle class 35-50 year olds that don’t have anything and are in debt up to their eyeballs. Those 55+ year olds are sitting pretty retired living off SS/Record stock prices/Record housing prices etc.
You are right nobody has anymore in the middle class. But the top 1% are doing amazingly well. Problem is they can’t possibly support any significant part of the US economy unless they just start handing out money and giving away their wealth.
If I were in the top 1%, chances are I’d buy a sweet ride.
“Those 55+ year olds are sitting pretty retired living off SS/Record stock prices/Record housing prices etc.”
Funny you should say that. I’m 55 now. How exactly do I tap into the Social Security pool and retire? That would be so much more fun than working night shift (62-1/2 hour weeks for the 3 weeks) . Maybe those “record high stock prices” reflect well in my 401K, but for some reason I’ll be penalized if I start cashing in on that “bonanza” right now.
I want to be sitting pretty, and retired. At 55. Please enlighten me, oh wise one.
I’m 55 also, my wife and I earn good money, have a relatively small mortgage, one car payment and average credit card debt. We aren’t pay check to pay check but are pretty close to it. Our house would sell for four times what we paid for it 15 years ago, our 401k is doing great-all of which means nothing until we can draw off the retirement account or sell our house. I’m convinced that house prices and the stock market will both crash before I can realize the gains
exactly right. note nike shoes sales down.
the street has short money.
Stop making crap cars?
True or not, GM has poor perceived quality; so either they make the most fuel efficient cars (like the Japanese in America); fun to drive (BMW) or quirky (Subaru). Don’t have the cachet of Mercedes so not including them.
Out side of the Bumble bee in the Transformer movies, no GM car comes to mind.
I think Suburbans (and other large SUVs) are still very competitive and with their trucks; the only thing keeping them afloat.
Bolt, Volt haven’t caught on – > Maybe should have hired LeBron or other sports or other celebrity and make him drive these cars at a price of $100 million to make them appear desire worthy. Elon Musk is like the Steve Jobs – his words sell his cars when they are not even made. GM needs to be bolder.
Elon Musk is total incompetent dope who’s Tesla’s suck up so much government subsidies and tax breaks the entire line would be a thought in his head instead an actual car if if it wasn’t for .gov. That guy doesn’t know the first thing about building a product that will sell in the free market. Not saying GM doesn’t or hasn’t gotten deep .gov discounts but everyone and their brother idolizes these nitwits like Musk and Bezos without even understanding how anti-free market their companies actually are.
I drive a Jeep Grand Cherokee. I drove a Jeep Unlimited before that. The latter before that. No not everyone out there is some greenie, hipped, granola eating millennial just waiting to buy an overpriced Subaru. I’ve test driven just about every SUV out there from foreign crossovers to full size American tanks. The Acadia is a damn nice vehicle. You get more for you money from a Jeep Grand Cherokee than just about anything out there. People love to rave about foreign company cars like Yotas etc. By the time they nickel and dime you for things like leather, all wheel drive, nav, etc. the price tags for those cars are higher than their American counterpart. As far as quality Toyota has been missing the mark for years now. Recall after recall. Honda? What do they have? The ugly Pilot? Ugly CRV? Ugly boring Civic? That pathetic absolutely horrid hybrid truck/suv thingy? And KIA? Santa Fe drives like a cheap import. Mazda? Their newest crossover has been a TOTAL flop with the ridiculous screen that just sits right on the console.
Even luxury brands like Infiniti and Lexus aren’t that great anymore. Audi? Overpriced German garbage with many models. The German cars look good but BMW has gone downhill on many fronts.
I got 333,000 on a 1993 Honda accord and 356,000 on a Toyota Cressida. They were trouble free until the Honda just plain wore out and the Cressida (most under-rated car in history) had tranny trouble. In the old days, you could buy a Japanese used engine with 60k miles on it. I wont be driving an Arcadia OR Jeep any time soon. BTW, I bought the honda with &3k miles on it for $2,500 and paid $1,500 for the Cressida – don’t rememebr the lieage but I drove the tires off that car!
He’s talking about current model vehicles—it’s currently 2017. 1993 is 25 years ago. The Cressida ceased production in 1992. Surely you’ve heard that Toyota & Honda aren’t as legendary as they once were???
Forbes has a list of 14 autos not to buy. 3 are jeep. Compass, Patriot, Cherokee.
Re: Toyota, Honda etc, low quality. You should contact JD Power, Consumer Reports etc, and straighten them out.
He said he drives a Jeep Grand Cherokee, follow along.
They’re very nice vehicles—we’ve had 3, all very reliable.
I was going to say that I leased a 1999 Jeep Cherokee and hated it It was a real gas guzzler as well My first new vehicle on the other hand was a 1978 Jeep J10 pickup which I actually used for contracting work and I loved it I think Jeep has gone downhill
The Chevy Volt and Bolt have both gotten excellent reviews from automotive publications. And yet they don’t sell very well (the Prius vastly outsells them, for example). So perhaps GM’s problem is that the typical buyers of EVs and hybrids aren’t looking at GM products? In that case, it’s an image problem, more than a product problem.
Right. The image they created is coming back to haunt them. Few people associate GM with efficiency, but instead with big and bloated muscle vehicles.
I see plenty of Bolts/Volts in my neck of the woods. And the Prius is a sales phenom. I never thought I’d see them sell as well as they have, it’s Prii everywhere. They’ve got something like 4-5-6 body styles now, it’s amazing. Good Uber car (in that sense that any can be; there is no good Uber car because of the wear and tear).
You can buy a house in most of the country for the price of a GM car, or several houses in Detroit. They are asking 50-90K for a Cadillac, that’s the problem. It’s a giant ripoff.
The consumers don’t make the salaries or the benefits of a GM worker. I have to assume they just want to off shore to China.
Ummm that’s kind of an exaggeration. I don’t know where you live but you can hardly afford any type of stand alone house worth living in for under $100K.
It’s a damn Cadillac. What do you expect? A Cadillac Escalade rivals anything BMW or Infiniti etc. puts out and then some. Have you ever driven or been in any of them? I owned an Infinit QX80 and I’ve driven an Escalade. Cadillac are luxury cars that demand a luxury price tag. You wanna talk about overpriced junk look at Land Rover!
And there are PLENTY of people making what GM workers make what is this argument? Nurses in many parts of the country are making $40/hr……All types of corporate people make close to $100K. So yes the average consumer does make what a GM worker makes they just don’t have the retirement/pension etc. Why do people constantly bash factory workers nowadays? Most corporate lackeys fall into two categories:
1) Ridiculously overpaid middle managers who contribute very little to the bottomline of any corporation
2) Lower end paper pusher/admin/service people that are paid almost as well as GM workers but don’t actually produce a product or even a service that the US economy really needs.
There are plenty of nice 3/2 all over the country for well under 100K. If you are retiring you can live well in plenty of places. There are plenty of listing on zillow alone.
Can you please furnish some examples? Preferably places folks would want to retire in.
rex—how about anywhere in Ohio for starters.
Petunia I think Nick is talking about in the land of fruits and nuts Of course if you go to the boonies you can get great housing values Economically depressed areas with high taxes like Hartford Ct come to mind or ghetto areas with high crime rates
I paid the equivalent of 23k dollars for my 2015 VW Tiguan exactly two years ago Love it and I plan to keep it awhile Anyone paying 90k for any GM product needs to see a psychiatrist immediately in my opinion
I wouldn’t worry…offshoring to China will be a thing of the past within the space of another couple of decades.
That’s when they’ll be offshoring their no-skill work to us, whilst they enjoy the fruits of their decades of industrial planning and infrastructure investment.
Your (grand)kids will be learning Mandarin in order to work in a contact center.
If you think this is exaggeration or hyperbole….then you have no idea of what is going on.
The Chinese can plan all they like, but when that infrastructure starts to fall apart, and the consequences of ecosystem destruction and degradation kick in, they will be in one hell of a mess.
The gods mock those who plan, without fail.
But above all, those whose plans leave out too many important factors.
New hires at auto plants under UAW contracts make $17.00 an hour, not such a princely sum, and it takes them eight years to reach parity with an ever-dwindling number of senior, top-tier employees.
Sorry, but that myth about the affluent auto worker is fast fading into the mists of time. It’s hard, dirty, noisy, often toxic/dangerous work that kills your body, and auto workers deserve every penny they earn.
MF,
The cars still cost 50-90K regardless of where the money lands up. I read years ago that the legacy cost of an American car was at least 5K, I’m sure that hasn’t gone down. The price range of the Cadillac is above the median income of the country. It’s price gouging or incompetence. You decide.
MD,
Every time I see a video of China, I can see exactly where our money went. Shenzhen makes America look like a third world country. Even if most of it is cheap and inferior, it is still impressive.
The impressive pictures of China’s sparkling cities does not show the often horrible quality. There are a lot of videos on Youtube about how newly built homes and buildings are already falling apart. Also, people who live in a condo building are often unwilling to spend any money for the common building upkeep.
It was you who made the statement that auto workers are far more highly paid than most car buyers.
I pointed out that you were mistaken, and given the facts I stated, it’s also obvious that “regardless of where the money ends up,” it ain’t in the pockets of auto workers.
Petunia, the problem with your argument that Cadillacs are overpriced, is that most Cadillac models are actually cheaper than most of their competition. The XT6 is targeted to compete with Mercedes, BMW and Lexus models that have higher starting prices than it has.
I’m pro buy American but there is no way I would buy a Cadillac, at those prices, over a BMW or Benz. That’s crazy.
Well, if you’re going to accuse Cadillac of price gouging, then I guess they’re all price gouging, since Cadillac has a lower starting price than its competition (by tens of thousands of dollars in some cases).
Marc,
It’s not just the price gouging. It’s the quality issue. I know people with Benz’ and BMWs, they keep them forever. You would be lucky to have a Cadillac last until the last payment.
We had a GM car repo’ed when we were 2 weeks late with a payment. They did us a favor.
Sorry for their problems, but I’m planning to buy a new Chevy in December. This will get me a better price. Economics in action.
Eh, General Motors would have died years ago if it wasn’t because of the US government bailing them out. And it has been losing money for a while…
Not true. GM made $9.43 billion in net income in its most recent full year (2016). And they’re expected to make about the same in 2017.
Even though U.S. car sales have been mediocre, they make money because of trucks and China.
What’s the average age of vehicle on US roads?
No peanut gallery “Are you lazy, why don’t you look it up” responses please, I already know the answer.
I really don’t know the answer but I currently drive a 1997 Ford Explorer XLT with 183000 miles. Run well, regular maintenance done. I’m looking at least 215000 miles.
You’re “looking” at 215k you say Surprises pop up that make the search unrealistic many times Trust me I know That said good luck to you
According the US Department of Transportation: 11.6 years
https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_26.html_mfd
I drive a 2002 Ford Explorer with 208,000 miles. I did put some money in repairs the past 12 months (brakes, wheel bearings, tires) but it runs fine. No interest in a big car payment for 7 years. I use about $45 a month in gasoline. If buy a new car that gets double the gas mileage I save a whopping $22 a week in gas. I don’t give a crap where I park it as another nick or scratch won’t make a difference. I will replace it when something major goes (i.e. timing chain). Then I will buy used and let some sucker take a hit on the depreciation. And I will not be buying a GM product because of the bailout. The last GM I owned was 1971 Caprice that I got rid of in the early 80s. My wife drives a 2004 VW Beetle with less than 80,000 miles. Being a VW it could last a few more years or a week, who knows. Neither of are a manufacturer’s or dealers dream customer.
Buying new cars is a waste. I have a 2001 Civic with 100k miles bought new in 2001 for 10 grand
Doesn’t demand a lot of service, is miserly with fuel. Gets me to local train or Grocery. Wife derives 2007 loaded Sienna bought new for 27k in firesale in great recession.
I may replace my Civic with a used minivan but Math kills me from doing it. Only reason would be to be get a safer car as I am single wage owner so a heavy car would save me on my 3 mile commute to transit place
Most people consume unnecessary goods including expensive cars for no good reason.
BTW, I could buy pretty much any car except exotics for cash or credit easily so money ain’t an issue.
People conflate needs with wants and most people I know buy expensive cars because it suits their image in Silicon Valley.
It’s not a waste if you value owning something new and can afford it Why does everyone always say that It’s like they say ” You can’t eat gold” funny
Most people consume unnecessary goods including expensive cars for no good reason.
You can afford it and you want to are a GREAT reasons. My wife drives a luxury 3 row tank because that’s what she wants. My car is loaded and has less then 15k miles on it. We paid cash for both. I wouldn’t be caught dead in a 2001 Civic, but God bless you and the choices you make.
“What’s the average age of vehicle on US roads?”
I see that Wolf has found the answer – 11.6 years.
Wow. It seems like just a few years ago that average was 7!
My, how times change. But, why is the average age rising? Is it due to better quality vehicles being produced? Is it due to lowering repair costs? Or, is it driven by necessity, where the average person cannot, or will not pay the higher price demanded for new vehicles?
What amazes me even more about that statistic is that I know it had to be heavily skewed by the “Cash For Clunkers” program. That alone pulled forward a good amount of demand, and at the same time removed thousands of affordable used vehicles from inventory.
GM has ugly cars that don’t stand up.Forget finacial incentives,
give a 100,000 5 yr bumper to bumper instead.Then hire an
I
Italian artist with talent and pay up . They useto make beautiful
cars that stood up.
Make GM great again
Force the Yen down to 90 to the dollar (where it should be) and all of GM’s problems will go away. Unfortunately, GM is not only competing with Toyota and Subaru, but the Japanese government that keeps the Yen weak as a matter of policy, no matter the cost. Can you imagine an American government that actually designs policy to help American workers instead of bankers? I can’t either.
All Japanese automakers have plants in the US, including Subaru. Honda is one of the most Americanized automakers out there. Sure, the US plants source some of their components in other countries, as does GM, which actually builds cars in Mexico and imports them to the US. So no, you cannot blame the yen. You need to blame GM.
Here is a chart the “American Made Index” that shows how many US assembly workers are supported by each car model (2016). The top five are Toyotas and Hondas made in America. GM’s Traverse is in 6th place.
https://www.cstatic-images.com/stock/1170×1170/64/img1239201116-1466633302164.jpg
In terms of production in 2016, these are the leaders in the American Made Index:
1. Honda Accord (2)
2. Toyota Camry (1)
3. Toyota Sienna (3)
4. Honda Odyssey (4)
5. Honda Pilot (5)
6. Chevrolet Traverse (6)
7. GMC Acadia (7)
8. Buick Enclave (8)
https://www.cars.com/articles/the-2016-carscom-american-made-index-1420684865874/
The US content of our vehicles is a complex topic, and an index like AMI may not be the most accurate way to measure this, but it gives you an idea that no, it’s not the yen.
Now that I’m digging into this, here’s an update… The above lists are heavily impacted by total sales (number of workers supported by the model, etc), so the vehicles with the most sales tend of move to the top of that list.
There is a new American Made Index out now, based on a different methodology, that figures it on a per-vehicle basis (not the number of workers the model supports). This may be a more accurate reflection of the domestic content of the one vehicle you buy. According to this new method, the line up is this:
2017 Model (Assembly Location)
Jeep Wrangler, Wrangler Unlimited (Toledo, Ohio)
Jeep Cherokee (Toledo, Ohio and Belvidere, Ill.)
Ford Taurus (Chicago)
Honda Ridgeline (Lincoln, Ala.)
Acura RDX (East Liberty, Ohio)
Ford F-150 (Dearborn, Mich., and Claycomo, Mo.)
Ford Expedition (Louisville, Ky.)
GMC Acadia (Spring Hill, Tenn.)
Honda Odyssey (Lincoln, Ala.)
Honda Pilot (Lincoln, Ala.)
https://www.cars.com/articles/the-carscom-2017-american-made-index-1420695680673/
My point about the Yen is that, after profits are converted into Yen, Japanese companies couldn’t make it in this country without an artificially weak currency, so GM and Ford are competing against companies that are getting de facto subsidies from their government. If the dollar weakens, imported parts will cost more, and domestic firms will have to pay more for them. Also, “American” cars assembled overseas will not be as profitable, but that’s what happens when you rely on cheap foreign labor. But you are right that only cars with mostly American made parts help Americans workers, even if the firms that employ those Americans are foreign.
Not to mention that the made in America Toyota Avalon and Camry contain the highest percentage of American made components of any car in the world.
I’ve driven a number of recent GM vehicles, and they’re crap.
I got a Chevy Impala as a rental car. Wheezy engine, fussy transmission that always seemed to be in the wrong gear. Awful rear visibility, and no backup camera on the base model. Every time I backed up, I prayed that I wouldn’t hit something that I couldn’t see.
Another rental: Chevy Equinox SUV. Had barely 6,000 miles on the odometer, but already had an astonishing collection of squeaks and rattles. And things literally falling off the dashboard. I couldn’t give it back fast enough.
I also recently test-drove a Chevy Volt. Very modest power/acceleration – Useless traction control that utterly failed to prevent me from spinning the front wheels when I tried to launch the car into traffic. Odd handling…the car did what I told it to do, but I was getting virtually no feedback on how close I was taking it to the limits, until I crossed the line and everything went squirrelly. Not confidence-inspiring.
I also had trouble holding my breath while driving: It had more of a new car STENCH, and I found being inside it pretty unpleasant. I was completely turned off by the built-in navigation system: Totally non-functional unless you purchased a service subscription that cost $400/year. Google maps/Waze is free, and even a Garmin GPS only costs $200…ONCE, with lifetime map updates included. All this for merely $32,000.
To get me into a GM car, you’d pretty much have to GIVE it to me. No way would I pay money for it.
Sedan segment is dominated by either luxury/sport (lexus, audi, porsche, bmw) or reliability (honda, acura, korean brands on low end), neither of which GM is known for. Everyone else is buying big trucks and suvs or subaru wagons. The dont have a best in breed niche as far as I can tell and so its not surprising their sales are SOL.
– Chevy, please modernize that frickin logo. It’s brutal.
– What generally goes unmentioned about Volt is that it’s a four seater. Awkward. No one can sit in the middle of the back. There’s no foot space. My wife and I would have considered one some years back, but this was a deal breaker. They can’t figure out how to put the battery all the way in the back like Toyota?
– They really should just stop making cars unless they come up with a great plugin. And it can’t just be good like Nissan Leaf which has struggled terribly. It must be great. Everything else can go, aside from the presidential limo.
– Should have been forced to manufacture in the US as a term of the bailout.
It’s just as cheap to manufacture here. I still can’t understand why most Americans fall for this con that it’s cheaper to manufacture elsewhere. They don’t contemplate shipping, duty, quality control, travel, bribes, etc.
When manufacturing goes overseas, the customer doesn’t get better pricing. It only means that the C Suite and stakeholders take a larger stake away from labor. That’s it. Name a single product that’s cheaper from being overseas.
Then why is a lot of our food imported from Asia where they have a huge market for food I bought some Tilapia fillet and it was from China
Tilapia is a warm climate fish for starters, Not many fish farms in North America producing your desired fish. Just using wikipedia alone the numbers from 2010 show 10,000 tons produced in USA, but the world produces 3.5 million tons. While Americans consume 1.5 million tons. 99% of Tilapia is likely imported, sorry you can’t support local when the food you desire is exotic to your area.
Not all economic sectors are equal. If you just use the auto industry you can still provide an example of a foreign product on an american vehicle. Most replacement parts are made somewhere else, only the vehicles on assembly lines have to meet the NAFTA requirement. All replacement parts are free market, best price tends to win.
I have a few products in arms reach of me, a filter from USA and a filter from China, a spark plug from Mexico and an Air valve from Mexico. Even some Energizer batteries from Singapore, but the batteries are not an automotive part. Just giving you some better examples than some fish you can’t catch in most lakes or rivers.
They cannot stop making and selling cars, no matter the costs, as they must meet CAFE standards.
https://www.transportation.gov/mission/sustainability/corporate-average-fuel-economy-cafe-standards
Despite the gazillions of dollars spent on advertising automotive sizzle and jewelry, at some point they’re nothing more than a transportation appliance. For those with the $$$ to waste on a tarted-up, bejeweled bauble, mazel tov. You’re helping MAGA.
For an ever-increasing number of folks however, the sparkle just ain’t worth it. Folks with student loans, people forking over 50% of their meager income to keep a roof (shared with other families) over their heads, and food on the table won’t be able to play.
Also, I’m guessing here, but for many of the retiring baby-boomer cohort, ANY vehicle purchase is likely to be the last. We’re in that category and I expect the current paid-for fleet will last as long as I/we can drive. Cars simply last MUCH longer with reasonable maintenance and I haven’t seen any improvements in safety or reliability to justify replacing any of them.
Things like Lyft and Uber are making it possible to be car-free in many urban environments. By the time you figure tax, title, license and (ahem!) “dealer prep.”, you can take an awful lot of rides to the store, doctor, etc. And many, many locales have senior transportation options that work fine with just a bit of planning.
Finally, at what point does the gridlock from urban infill get to the point of simply being unmanageable and vehicles become an outright liability? Everywhere I go these days in cities large and small, congestion is just to the point of … well, words fail! UGH!
Your mileage may vary, as they say!
NO Not for this retired baby boomer it certainly will NOT be my last god willing and that was a very condescending statement by the way Downright nasty there Mr Taco Us Deploreable ain’t dead yet and a lot of us have a lot of fight left in us so I would keep that in mind
I wonder what impact the aging US demographics will have on auto sales? I’m recently retired and I’ve noticed a distinct change in my view towards automobiles. My generation was crazy about cars, however, I no longer have an interest in buying an impressive vehicle. My 10 year old Lexus will likely be with me for many years to come.
Chevy makes and sells more cars in China than they do in America. Even though they have to split the profits with a Chinese partner company, they make more profits than in America.
the cars sell for about the same price in China as they do in America.
The average (not entry level) auto worker makes about $5.75 US an hour. This buys a middle class life, measured by Western standards, in China. A lot of other costs are lower. There is no property tax, and income and business taxes are very low. The cost of health care is low, making the health insurance that employers are required to supply quite reasonable.
America is a very expensive country for a manufacturing business these days.
Buicks are big sellers in China. They’re dead in the US.
VW was the first Western company to partner with a Chinese company. They brought in the high Audi’s which were given out to all the middle and upper management in State Owned Enterprises. Now some of these guys are driving a Buick LaCrosse. It’s the same size, and the looks are new to the Chinese. Everybody wants to be different. Another choice is the Chrysler 300 in black. Buick sells a lot of cars here from tiny econoboxes to full size sedans to oversized vans.
High end SUV’s are a way to show off here. In my neighborhood Range Rovers and MB and Porsche SUV’s are common with housewives. Somebody on the block just one-upped everybody by showing up in a Maserati SUV. I didn’t even know they made such a thing.
P.S. I don’t own a car. The bus costs 13 cents and they go everywhere. I can take a taxi all the way across this city of 3.5 million for 6 bucks US.
Didi (Uber) is very cheap but I don’t use it.
A parking space in the garage of my building costs $22,000. I can take a taxi a lot of times for that money.
I remember an old saying that what’s good for GM is good for the country. It looks like GM is having an awfully hard time figuring out what’s good for itself lately, and so is the country.
Now I am one of those people who simply buy a set of wheels that gets me from A to B. New (no major troubles the first three years), second-hand (may have to spend money on repairs), big, little, sports, utility, whatever. I figure out the capital cost, the depreciation, interest rates, fuel costs (high over here in Europe)etc. Then I plunge.
So I bought an absolutely brand-new Dacia Sandero which is a sort of cut-rate copy of a Renault Clio, but made in Romania. It cost me all of $8,200 – cash – and comes with a five-year guarantee. All right, it will never beat the pack at the lights, it has a top speed of about 85 mph – but it does get me from A to B, using a mere 40 mpg. And in terms of safety it is no worse than any other small car.
I think that the real trouble with GM and all those other US manufacturers is that they have gradually convinced the US consumer that $25,000 to $35,000 is the sort of price one pays for a new “decent” car. And even the cheapest new cars in the US are all in the $15,000 bracket, or about twice what I paid for my car.
Am not sure where you are but many cars sold outside of the US do not meet safety or emissions standards here which drive up costs substantially.
Maybe the answer to GM’s woes is simple indeed. Each brand targets a certain group of customers. What if the target groups for most of GM’s models simply are maxed out and thus are unable to afford the extra debt needed to buy a nes car ?
The headlines today say this:
* Britain to ban all diesel & petrol car sales from 2040.
* Paris to ban all diesel & petrol cars by 2030.
* Oxford to become UK first city to ban diesel & petrol cars from center.
* As Europe sours on diesel, Germany fights to save it.
* Diesel cars banned for major EU city’s to tackle illegal levels of air pollution.
* & it goes on & on & on.
Q: With the advent of Man Made Global Warming Science – exactly where has the attention of GM automakers been ?
Electric cars are easier to make.
Lithium is the new GOLD.
Electricity is the new fuel / the fuel of the future ….
Has GM taken steps to invest in renewable fuels ?
All the private cars will have to be replaced.
All the buses will have to be replaced.
All the transport trucks will have to be replaced …. what a shame it is that rail systems have been shut down & torn up.
Look at how much money there is to be made –
Is GM BLIND or BRAIN DEAD ?
GM has been investing a lot in EVs, and has the new Chevy Bolt out, along with a number of hybrid models. They’re actually way ahead of Ford and FCA in terms of EV technology. But as for the European market, GM pulled out of that this year, when they sold Opel and Vauxhall.
son bought a 2014 chevy volt with 26k on it for 14k. He loves it. He just uses it around town and very rarely burns gas. This car was 35k new. Has no resale value but I was impressed by it and I’m hard to impress!