Focus To Electric Vehicle Market Drives Changes At GM
DAVID GREENE, HOST:
General Motors is planning to shutter five plants in North America and lay off thousands of workers. One of the plants is in Warren, Ohio. And we spoke with that town's mayor, William Franklin.
WILLIAM FRANKLIN: One thing about our community, fortunately and unfortunately, is we've been down this road before. Understand that GM had went from three shifts to two shifts to one shift. And as of Monday, they announced the closing of the plant.
GREENE: Now, GM says they have to get more lean to prepare for the next economic downturn and also become more nimble in a changing transportation industry. Micheline Maynard has witnessed the rises and falls of GM for decades. She's a longtime auto reporter. And she joins us now. Micki, good morning.
MICHELINE MAYNARD: Good morning. Thanks for having me.
GREENE: I guess just listening to the voice of that mayor is a reminder of how important this company and this brand can be to a community.
MAYNARD: That's right. In the old days, General Motors was known as Mother Motors. You went to work at General Motors maybe out of high school, maybe even in high school. And it took care of you for the rest of your life...
MAYNARD: ...Until retirement.
GREENE: Well, does the company have a valid argument here about why these cuts are necessary?
MAYNARD: Well, absolutely. And a lot of us who covered the auto bailout 10 years ago now wondered if the cuts that took place back then were deep enough. It was always a feeling that there might have to be another set of cuts before General Motors was ready for the future. But even so, these did come as a surprise.
GREENE: So what is changing in the industry that is forcing this? And why might it be a surprise if these trends have been there for some time?
MAYNARD: Well, I think the carmakers have successfully been selling big SUVs, pickup trucks and what are called crossover vehicles. And their profitability is so high. And they cleaned up lots of debt in the auto bailout at General Motors and Chrysler that people thought everything was fine. But underneath the surface, we're seeing kind of an attitude change towards car ownership. The youngest consumers put off getting their driver's licenses. They have lots of student debt. They're putting off buying new vehicles. These are the people you see on scooters and skateboards and bike share.
GREENE: Those are people - the companies look at that and they just see potential customers who are not driving cars at the moment.
MAYNARD: Well, not only driving but not owning, and that's the big issue for them. So I think what they've been trying to do is sort of front-load everybody they can into pickups and SUVs, which are really high-profit vehicles, and then, you know, wait for the future to come. But unfortunately for a lot of people, the future's already here.
GREENE: So we talk about this being a surprise, the fact that Americans want SUVs and these bigger vehicles. I mean, should a company like GM have realized that? Like, they're killing production of this hybrid, the Volt, which was seen just a decade ago as the future, right?
MAYNARD: Yes. In fact, they went before Congress in order to argue for what was then called a bridge loan and said the Volt is the vehicle of the future. We're going to move into a future with hybrid vehicles, electric vehicles. Now we're talking about self-driving vehicles. But underneath it all, they were still building what we call cars by the pound, the big vehicles. And, you know, at some point, it just - the string just runs out.
GREENE: How does this moment compare to other big GM moments that you've covered?
MAYNARD: I mean, it's - in terms of numbers of plant closings, it's not large at all. And I mean, I remember - another holiday period many years ago, I think GM closed 22 plants. And, you know, I believe something like 100,000 workers were affected by that. So this is significant, but it isn't the largest ever.
GREENE: Micheline Maynard is the author of "The End Of Detroit: How The Big Three Lost Their Grip On The American Car Market." She's a veteran auto reporter. Thanks so much for coming in.
MAYNARD: Thanks for having me.
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