GM to Restructure; Shutter Five North American Plants

BY DOMINIC COLETTI

General Motors announced a string of changes as part of an ongoing effort to keep the automaker relevant in a changing market. As part of the changes, the company announced a sweeping staffing overhaul, cutting 25% of executives and 15% of the total salaried workforce. In a press release outlining the changes, GM announced three assembly plants: Oshawa, Detroit-Hamtramck (pronounced Ham-tram-ick), and Lordstown as well as two propulsion plants: Baltimore and Warren will be unallocated. The three assemblies all manufacture cars (i.e. sedans and coupes) which are declining in popularity as crossovers, SUVs, and trucks take larger and larger shares of the market..

These closures affect approximately 15,000 employees, infuriating American and Canadian officials. Canadian Prime Minister Justin Trudeau expressed his “deep disappointment” with the decision in a phone call with GM CEO Mary Barra, and U.S. President Donald Trump, who staked much of his campaign on the renaissance of American manufacturing, threatened to cut all government subsidies benefiting the company. Ms. Barra described the moves as being taken to “continue [GM’s] transformation to be “highly agile, resilient, and profitable.”

GM officials did not immediately respond to a request for comment.

While GM has announced the closures as official, Unifor (a Canadian trade union) promised “one hell of a fight” over the Oshawa plant being shuttered, and the United Automobile Workers (America’s automotive trade union) vowed to fight any U.S. plant shutdowns. As well, many in Detroit are enraged as GM plans to close the Detroit-Hamtramck Assembly. Residents unconnected with the auto industry nonetheless recall the controversial use of eminent domain and the razing of a Hamtramck neighborhood. Many are concerned that the plant’s closing will make the relocation of hundreds of families for naught.

GM choosing to downsize seems strange considering the company is currently quite successful financially. Since being bailed out by Congress, the automaker has found broad success, making an initial public offering and returning to profit in 2010, the year after it received Federal monies for relief. However, the moves are intended to prevent the company from falling behind as consumers shift away from cars and towards larger vehicles. Said Barra, “These actions will…improve resilience through the cycle,” suggesting GM is becoming more adaptable, striving to avoid another corporate collapse.

A Brief History of America’s No-Good, Very-Bad, Horrible 25-Year Import Rule

BY DOMINIC COLETTI

Most station wagons are not fast cars. They sit one step above minivans in terms of coolness. Of course, the Audi RS4 Avant isn’t most station wagons. It’s fast, it’s fun, it’s an all-around great car. Everything about it screams performance and luxury, and there’s enough cargo space to actually haul things. But we here in the US can’t have it. Americans have decided that SUVs are the way to haul the family and cargo. Thus, Audi hasn’t made the car available for sale here. With most other products, that wouldn’t be a very big deal. One would simply buy the car in Europe and ship it here (cheaper than you might think). There’s only one small problem: You can’t actually import most European cars.

US Customs and Border Protection will deny entry to any car not made compliant with the Department of Transportation’s (DOT) Federal Motor Vehicle Safety Standards (FMVSS) unless it is at least 25 years old. In addition, cars less than 21 years old are required to comply with Environmental Protection Agency (EPA) regulations, ostensibly to ensure emissions are within acceptable ranges. American standards are far less stringent than European ones, and emissions are emphasized much more in European marketing. Since most European (Euro-spec) cars are in fact compliant with US standards, they should be eligible for import. However, the EPA requires the vehicle pass a series of tests set up by the EPA inn order to be deemed compliant with US standards. Because Euro-spec cars aren’t built for the US, manufacturers don’t bother getting them certified. Thus, many perfectly good cars are ineligible for import. As an example, the British Honda Civic Type R, engineered for speed and not economy, gets 30.6 MPG for the British model compared to only 25 in the US. That said, the engine is exactly the same, meaning the difference comes in tuning. The banned car is more efficient than the legal one.

As for safety, the US and European Union (EU) use very similar ratings systems for crash tests. While the RS4 Avant hasn’t been tested by Euro-NCAP (Europe’s automotive safety authority), the A4 (on which the RS4 is based) received five stars from the agency. However, neither the Euro-spec A4 nor the RS4 is legal for import. The most absurd part of the safety argument is that while the RS4, with its cutting-edge safety technology is banned in the United States, a Yugo could be imported despite its not having a single airbag. The US-spec A4, with the exact same safety features, earned Good safety ratings across the board in Insurance Institute for Highway Safety (the American crash test agency). Some will argue that the rule exists to shield Americans from inferior cars such as the Nissan Tsuru (basically a ’90s Sentra built for the Mexican market), but Europe and Japan are all members of the United Nations World Forum for Harmonization of Vehicle Regulations which seeks to create a uniform set of regulations that protect car-owners.

As a result, the US has several options to make it easier to import these safe vehicles that automakers consider unprofitable for the American market. The best option is to simply join the World Forum and become signatory to prior agreements on the matter, allowing a universal standard of vehicle codes to regulate American automobiles. This would result in the free trade of automobiles across the world while not compromising safety. With this increased trade comes the greatest part of all, cheaper cars for Americans. When the American market opens to the whole world, there is more competition in the US market (not to mention considerably more supply). This results in Americans having to spend far less for cars that are just as safe as their modern family-moves. For high schoolers in particular, this would lead to newer, safer, more efficient cars becoming within reach, saving them thousands of dollars.