Industry analyst pessimistic about GM Lordstown future – WFMJ
The idling of the GM Lordstown plant goes to the heart of one of GM’s most significant problems, according to Kristin Dziczek of the Center for Automotive Research.
“They have about a million units of underutilized capacity across their whole production footprint in the U.S, and Lordstown at 450,000 units is almost half of that,” Dziczek said.
The head of GM North America says the idling of Lordstown is not the fault of the Cruze, it’s quality or the workers who build it, but a market shift that the industry has never seen before.
“At the end of the day, we’re responding to customer and market shifts, and that’s the reason we’ve unallocated the plants. The demand for cars has gone down dramatically and replaced with crossovers and SUVs, so we’re really just responding to the market,” said Alan Batey.
So, what does the future hold? GM, under CEO Mary Barra, is committed to electric vehicle production and analyst John McElroy of Autoline says there is a reason for that.
“Mary Barra doesn’t have a choice. There are government regulations all around the world, including in the U.S., that mandate you have to build electric cars, so they’ve go to do it. They don’t have a choice,” McElroy said.
The question many analysts have is whether the car buying public is ready to make that switch. Right now EV and Hybrid’s represent only one-percent of vehicle sales.
“Whether or not consumers embrace battery/electric vehicles to the numbers that some of these manufacturers are counting on, that remains to be seen,” said Peter DeLorenzo of the Autoextremist.
But he feels it could it leave a crack in the door for Lordstown. “There’s always an opportunity or development that will lead to production back at Lordstown.
While some are staying positive about the Drive It Home campaign and a new product for Lordstown, there is a growing opinion that GM is ready to put up a for sale sign and walk away from Lordstown.
“My guess is that GM is going to put up a for sale sign. Hopefully, some other developers would come in and want to do something with that property, but right now it seems highly unlikely that GM would do anything else with it,” McElroy said.
It’s a decision the Regional Chamber of Commerce and the State of Ohio would hope GM makes before the end of the year.
“If they don’t have an investment decision moving forward, meaning they’re not going to further invest or bring a different product here, then what are they going to do? And as governor, DeWine said, “If you’re not going to invest, if you’re not going to move forward, tell us,” James Dignan, President of the Regional Chamber said.
The big question is, When will GM reveal what’s next for Lordstown. Those with hope feel that things could change if there is a breakthrough contract with the United Auto Workers.
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