General Motors Factory Shutdowns Reveal Trend in US Auto Market

Navigant Research discusses General Motors' announcement to close US factories on NPR’s On Point program

Earlier this week, automaker General Motors (GM) announced it would shut down five plants across the U.S. and Canada, laying off over 14,000 workers and 15% of its salaried employees. GM said it is preparing for big changes in the automotive market and for a coming economic downturn. 
 
In a podcast for On Point with NPR, Samuel Abuelsamid, senior research analyst at Navigant Research, discussed the closing of the plants and what it means for GM and the future of the automotive industry. 
 
“I think a big thing to look at is the products that were being built at these three plants. All three of these plants are focused on car production, particularly small and mid-sized car production, which is a segment that has been shrinking pretty significantly over the past 4-5 years in the U.S.," Abuelsamid said.
 
In the U.S., consumers have been shifting toward buying SUVs, crossovers, and pickup trucks. Both Ford and Chrysler have already made announcements that they are planning on shutting down production of similar unprofitable car models.
  
Abuelsamid said it is possible that GM might repurpose some of the plants it plans to close for new types of products, including electric vehicles. GM would also need to work with unions and properly retrain employees to work effectively on these new lines, restoring jobs to these hard hit areas, he added.
 
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