Is GM Giving up on the United States?

by Greg Pollowitz

Here’s an interesting article in Der Spiegel about a GM strategy memo that suggests plant closings in Western Europe and the United States. An excerpt:

An internal General Motors strategy paper reveals that the US automaker wants to close its plants in Western Europe and transfer production to low-cost countries. The document means that the future looks bleak for Opel’s plant in Bochum and Vauxhall’s factory in Ellesmere Port.

[. . .]

No Future

Opel CEO Stracke is not in a position to deny plans for a closure of the Bochum plant. After all, a plan exits in Detroit which indicates that a number of factories in Western Europe have no future.

An internal strategy paper titled “Global Assembly Footprint” was presented at a “GM Global Business Conference.” According to the document, the US company plans, if sales increase, to produce 80 percent of the additional vehicles in so-called low-cost countries such as Poland, Russia, China, India, Mexico and Brazil. Currently, General Motors still produces nearly half of its cars in high-cost countries in North America and Europe.

The strategy means that plants in the United States, Britain and Germany are threatened with closure. In low-cost countries, however, production will be expanded. While production in Bochum is to be stopped by 2015 at the latest, production capacity in Gliwice, Poland, will be increased by 25 percent. Another reason why factories like those in Bochum have no future is because GM wants to increasingly supply the European market with imports from low-cost countries. By 2016, an additional 300,000 vehicles will be exported to Europe from plants in Mexico, Korea and China.

At the same time, the US automaker plans to consolidate its global range of models. According to an internal plan, the number of vehicle platforms, currently 30, will be cut to less than half that figure by 2018. In the future, there will hardly be any models that are developed specifically for a market like Europe.

Oh, and Europe is “embracing” the electric car about the same way America is . . .

Opel CEO Stracke proudly announced that Opel’s Ampera electric model had been chosen as “Car of the Year.” But the news earned him more ridicule than applause. With a keen sense for bad timing, GM had announced shortly before the start of the motor show that it was suspending the production of electric cars for several weeks — because demand was lower than expected.