GM, Ford, Chevy discussed on KNX Evening News with Diane Thompson
You're listening to KNX in-depth with Mike Simpson. Charles Feldman about eight years ago. General Motors son of a resurgent American economy emerging from the government bailouts financial crisis. Put the automaker on the brink of bankruptcy today. GM entirely different different kinds of scientists sign of a possible. Sinking auto industry GM is killing production of several of its passenger car models, including the innovative plug in hybrid volt. It will also cut fifteen percent of its salaried workforce in North America. All part of a sweeping six billion dollar cost cutting plan. Joining us now is Michelle crabs who is an auto industry analyst for auto trader and Cox automotive. The president says, well, what GM should do is in effect? Just start selling better selling models that doesn't sound like it's that easy to do though. No. It's not what we have seen is a dramatic shift in consumer preference away from traditional cars like the Chevy Cruz that's made in Lordstown Ohio that was mentioned in your piece to utility vehicles. And now what what GM announced today is the plants the Lordstown Ohio plant a plant here in Detroit do not have their eliminating the products that they sell that they sell that come from those plants. There will be an opportunity for those plans to bid on some future models that we don't know what those are. But next year is a negotiations year with the UAW, and that's always one of the hot topics during those negotiations is who's going to get the future product this. Transformation as it's being called. What is it geared towards you mentioned models? It will sell a bit better. What about way into the future? I mean, if they're positioning themselves for self driving or more electric within the volts going away. So so what are they aiming to do with this? Well, there's the short term, and there's the long-term right now GM needs to make as much profit as a can and get rid of businesses and vehicles that don't make money replace them with a business that does make money because they are spending a tremendous amount of their resources on developing electric vehicles and autonomous vehicles for the future. And right now, there's those are not profitable businesses. So they they need to use today's money to finance the future business is there anything the president can do has the power to do to change this outcome in terms of GM. That's a bit out of my league. But certainly the tariffs have been an issue. They're costing Ford set a billion dollars a year that the aluminum and steel tariffs are costing them. And as well as other may there's I have to believe the GM is in the same boat and subtle trade issues. One of the things the auto industry is a very long lead business. It takes four years to develop a new vehicle, and they need some certainty into what what the gate rules of the game are things like tariffs and trade issues. What does this do down the line? I mean, other companies and manufacturers depend on these models being produced because they make a part Ford or something like that. Well, they'll they'll they won't have orders for those parts, but again, supplier companies certainly can bid on future product business. You know, we just they're very secretive about what future products are coming down the pipeline. So they will definitely have an opportunity to bid on that business to replace it. This is what happens all the time in the industry cars certain vehicles, go away new vehicles, replace them. And the, you know, the supply base gets to bid on those just as the the plants. Do you have your ear to the ground? So to speak on the auto industry. Are you picking up any anything sort of bad vibes that other companies US automotive companies may follow suit they already have? I mean, Fiat Chrysler a few years ago decided there was no future in the traditional car business. They got rid of most of their car lines Ford earlier this year. Announced that it was pretty much getting out of the traditional car business and focusing on SUV's and trucks, with the exception of the Mustang. Of course. And you know, they've got some new products in the pipeline that will fill in the gap that of course, they're keeping secret. What happened with the the volts to just never catch on the Chevy, volt was kind of an interim technology. It's a plug in hybrid bench GM came out with the Chevrolet volt with the b and that's a fully electric car. And so people what looks to me like having people that were buying the volt decided I want an all electric vehicle and move to the bold. There will be many more choices of electric vehicles going forward. One of the reasons I think they haven't caught on is. They don't make a sport utility. And that's what people want so make a sport utility electric vehicle. And I think we will see those in the future. All these articles are talking about how they've got an eye on the economists future. But nobody knows if that's going to be successful. Or how commonplace it's going to be. But they're not the. The only ones I mean, everybody's got one eye on that. If it's even five ten twenty years away five ten twenty thirty years away. Nobody knows exactly. And and it's not just auto companies that are in that business. Obviously Louisville is one of the leaders with its Waymo division. It's already got a Thomas vehicles out there. So it will be definitely part of our future. How quickly it rolls out. And then what form that remains to be seen? Michelle Krebs auto industry analyst for auto trader and Cox automotive KNX in-depth continues.