General Motors building $600 to $650 million US plant in Mexico

[Judi Lynn]

General Motors building $600 to $650 million US plant in Mexico
08:00:34 EST Mar 31, 2006

DETROIT (AP) - General Motors Corp., which is closing plants in the United States, says it will spend $600 million to $650 million US to build a small car assembly plant in Mexico, employing 1,800 to 2,300 workers. It is to open in 2008.

The plant will be built in the central Mexican state of San Luis Potosi, GM spokesman Carlos Gelista said Thursday. He said the Mexican government is providing financial incentives for the project, with construction starting in May or June.

The plant will produce compact and subcompact vehicles, he said, adding that GM does not plan to sell any of them in the United States.

"We are looking to try to export some of the production of that plant to Central America and South America," he told the Detroit Free Press. He did not say how many vehicles it would build annually but said it would make 30 vehicles an hour.
(snip/...)

http://www.cbc.ca/cp/business/060331/b033102.html

[LostinVA]

1. Most people I know would love a sub or compact car

Especially if it got decent gas mielage...

[saigon68]

15. There are No POLLUTION CONTROLS on these cars

[Judi Lynn]

2. Detroit Free Press: GM plans assembly plant in Mexico

GM plans assembly plant in Mexico
Factory to build compact, subcompact cars
March 31, 2006
BY MICHAEL ELLIS

FREE PRESS BUSINESS WRITER

~snip~
Even with the gas prices running at about $2.50 a gallon, there's little demand in the United States for subcompact cars like the Chevrolet Aveo, said Catherine Madden, a senior analyst with Global Insight.

Gas prices would have to stay at $4 a gallon for a year to spur demand for subcompacts, she said. "There's not a lot of indication that Gen Y is going to jump into the subcompact segment."

GM sold 68,000 Chevrolet Aveos in the United States last year. Demand is much stronger for compact and subcompacts in Mexico and South America.

GM told Mexican media about the plant a week ago but didn't release information to U.S. media. GM might have been trying to keep the news quiet to not upset the UAW, said Guido Vildozo, director of South American and Central American forecasting with Global Insight.

"I guess they're awfully cautious to make sure that nobody in the UAW feels hurt by this decision. That's the reason they've kept a low profile on the news release."
(snip/...)

http://www.freep.com/apps/pbcs.dll/article?AID=/20060331/BUSINESS01/603310357/1014/BUSINESS

[tularetom]

9. Hey a solution to the immigration problem

Build all the factories in Mexico and look at the benefits we all get. No more illegal immigrants since all the jobs will be there, cheaper cars since the costs of assembling them will be far less. Of course we'll all be out of work so we won't be able to afford them.

[physioex]

11. Unlikely....

In the CNN piece they reported that the flood of US grain into Mexico has put their rural farmers out of business and has led to more an influx of illegals... But you knew that right ;)

[MrPrax]

16. Well yeah...

If Mexico does provide a healthy economic alternative to it's workers, then what would be the problem.

You're right, less and less Latinos would be willing to live as a 'sub-class' in the US; they could stay closer to home and closer to their families.

Why exactly do you believe that Mexican workers should really care if people in someplace called Michigan are employed. It's not their country and the US doesn't have a 'patent' on the automobile.

At least with investment, American firms get some piece of action; the alternative is for countries like Mexico (Sweden, Germany, Italy, Russia, China, Brazil, Korea, Japan, Czechoslovakia, etc) to just 'compete' directly!! You up to the challenge of a competitive auto industry?

I don't think so...Brand America is dead, buddy and whether or not people are working in YOUR country is YOUR problem--go ahead close the borders...I dare yeah, I double dare yeah...

[NickB79]

17. Yeah, no one wants compact, fuel-efficient cars, says GM

After all, it's not like Toyota and Honda are kicking our asses with their Corollas, Scions and Civics, is it?

They say gas prices will have to hit $4/gallon before they think compacts and subcompacts become profitable? Well, guess what, they'll be there in 2 yrs (maybe less if a lot of hurricanes hit the Gulf again this summer or we go to war with Iran). Wouldn't it make sense to build a factory that will be ready to start pumping out compacts when the demand skyrockets? If they sit around and wait until the demand is high before they even start building the plants, Toyota and Honda will bury them with years of a headstart, just like they did with hybrids.

[tanyev]

3. That's odd. Aren't they going to lay off thousands of American workers?

:sarcasm:

[Sadie5]

19. Closing Delphi

is there big plan if the judge approves it. Cutting workers benefits and pay so they can make even more money. But it seems they still have money to take our jobs out of the country.

[ThomasNewton]

4. 74% of GM's political contributions go to republicans so

I'll never buy another GM product as long as I live.

[jseankil]

22. Can you give a link where you got that stat please? /nm

nm

[Earth_First]

24. Actually, it's 62% at $5,452,759

http://www.opensecrets.org/orgs/summary.asp?ID=D000000155&Name=General+Motors

Remember that they also own GMAC and a host of other holdings in other areas such as communications, financial lending, aircraft manufacturing (as well as Sabb and Saturn) so 74% may not be far off from being reality.

http://www.opensecrets.org/orgs/affiliates.asp?ID=D000000155&Cycle=A&Type=P

[XNASA]

5. The current GM cars in Mexico are crap.

I was recently in Mexico and got a kick out of some of the GM offerings. The GM stuff looked really dated and flimsy along side the Ford and DC products.

Rented a subcompact Ford Fiesta for a couple of days and thought it was great.

Perhaps GM will update their line.

[proReality]

6. Makes me wonder....

how long it will be before Americans have to start crossing the Mexican border illegally in order to find a job that will feed their families.

[tanyev]

7. Yup. I wonder if the illegal immigrant "problem" will be solved

once and for all when there are no more jobs in this country and Americans will be flooding over the borders, trying to find work elsewhere.

[HereSince1628]

10. No. Then there will be an issue of off-shore landlords wanting

to maintain rental properties to the standard of a Chinese Hutang.

[maxsolomon]

8. how bout you make a subcompact that isn't CRAP?

the Mini Cooper is a subcompact, GM boneheads.

LISTEN TO YOUR DESIGNERS, not your managers.

[physioex]

12. That's right...

Count the number of Civis and Corollas out there. Where is your answer GM??

[Coastie for Truth]

13. They're getting ready for the post Chapter XI buyout

when Toyota begins assembling the new Toyota Yaris

<>

in that new factory.

[DrGonzoLives]

14. So, they can't afford to pay employees...

...but they can splurge on a brand-new $650 million plant in Mexico. Horseshit.

[jseankil]

23. Not horseshit at all

Without fair trade laws a company who isn't building factories in China or Mexico where the cost to produce products is significantly lower than it is in the U.S. will not survive global competion. You should be furious at the governemnt to have allowed this to happen.

FAIR TRADE NOT FREE TRADE!

[Bridget Burke]

18. So why don't American workers take to the streets?

Why couldn't we build cars here to sell down South? Most Latinos/Hispanics in Houston drive American cars.

[aeroamerica]

28. Take to the streets...?

How about starting auto companies of their own?

[B3Nut]

20. Here's what I had said on another thread

where this article was mentioned...I ranted at Ford too:

"The plant will produce compact and subcompact vehicles, he said, adding that GM does not plan to sell any of them in the United States."

DAMMIT GM, why? Why won't you sell them here? Your Korean-made Daewoo Chevy Aveo has the most mediocre economy of any B-segment car! Why not take another crack, this time with your new design? Why don't you retool that great plant down in Janesville WI that currently makes SUV's to make small cars? Why didn't you make a hatch version of the Chevy Cobalt? You already make it, it's the Opel Astra. You know, that continent called Europe. You can find it on the map, can't you? You just won't let us have it. You give us leftover cars and guzzling SUV's. Thanks. The same can be said for Ford...we get the old Focus with a bad nose job while Europe gets an all-new one based on the Mazda3. And we don't get the Fiesta at all, let alone that cute little Ford Ka. My Escort ZX2 was my last Ford. C'mon Ford...I loved that car, but it was time to replace it, and neither you nor GM nor Chrysler had what I wanted. Hyundai did, in the form of the Kia Rio5 hatch. It's a great car, tightly screwed together. Looks and drives like a European car. Good on gas. Surely you could make something like it here. The Honda Fit and Nissan Versa are about to clean your clocks in the small car segment. What do we get from you and GM? Yup, farking SUV's. And for sedans, you give us the Fusion, made in Hermosillo, Mexico. Hyundai offers the Sonata, made in Alabama. Or the Toyota Camry from Kentucky (and soon also Indiana). Or the Honda Accord from Marysville, Ohio.

Dammit.

Todd in Beerbratistan

[jseankil]

21. Without fair trade laws how are American companies suppose to compete?

Sorry, can't blame GM for building in Mexico, how else are they suppose to compete? You do the math.

[whathappened]

25. how else

first thing they can do is go back to there roots , and start from there , the american car was made in america by americans , the hell with world trade , make these so called come across the pond cars pay a heavy tax to get into this dam country , get these dam jobs back to america and quit playing around with the shape of this country , think america first and the world second

[tanyev]

27. I was a loyal Chevy customer until I just got sick and tired of

taking my car in for repairs every couple of months. But had they been ready with a small to mid hybrid car around the same time Honda and Toyota were, I would have given them another chance.

They chose to compete by building more and bigger SUVs. It doesn't appear to be working out too well for them.

[alarimer]

30. Fuck GM

they suck. Layoff American workers, claiming money is tight and then turn around and build a factory in MEXICO? Fucking pieces of shit.

[jseankil]

33. Brilliant words, thanks for sharing them. ~sarcasm~

Business A pays their workers $30.00 and hour inside the U.S. while business B pays their workers $8.00 an hour outside the U.S. Hmmmmm wonder if business A can stay competitive with business B?

How about instead of blaming business A you blame the government that allows business B to sell cars here without penalty? Or you just expect business A to just take the hit hahahaha. Welcome to Business 101.

Support Fair Trade Not Free Trade.

[lovuian]

26. Its all about breaking the American Union worker

they want CHEAP LABOR...

[recidivist]

29. It's not quite that simple.

GM has to compete with Honda and Toyota in the U.S. market. Honda and Toyota build a lot of their cars here, using decently paid American labor. That's the benchmark GM has to beat.

Now, if you're going to define Honda's and Toyota's US wage scales as "cheap labor," so be it. But if the UAW expects GM and Ford to be employing any of their members 10 years down the road, the union has to cooperate with management in getting labor costs in line.

I feel sorry for UAW retirees and workers with 20-30 years seniority who have been led down the primrose path. They're probably going to see bankruptcy-driven benefit cuts, and that's unfortunate. But even there, just watch how the entitlement mentality poisons the discussion. Much is made of the hugely expensive retiree health benefit package. If that were cancelled in a bankruptcy proceeding, UAW retirees would -- horror of horrors -- get dumped back into Medicare with the rest of us. That's not the end of the world.

Reductions in pension benefits are another and much more painful proposition. The lesson to be learned is that a defined contribution system, with benefits fully prepaid and the assets owned by the employee from day one, is the way to go. The GM and Ford defined benefit systems are just a microcosm of what Social Security will be facing about 10 years from now, when the SSS starts running a negative cash flow.

Do you really think Congress, which is already facing a huge deficit, is going to borrow hundreds of billions more each and every year to finance benefits for retirees with above-average incomes? I don't.

[alarimer]

31. They could compete if their products weren't crap

They build shit cars and then complain when everyone wants a Toyota instead. Instead they continue to build giant gas guzzlers even though gas is $3 a gallon. Fuck GM. I hate their cars and trucks.

[recidivist]

32. I always buy American.

I grew up in a GM town, have a lot of friends who work at the plant, and have always driven GM products. I've always had good luck with them too. Love my Saturn.

Reputations are funny things; GM and Ford are still trying to live down their failures of the 1970s-80s. Saturns were intended to be import beaters, and by and large they are; a Saturn undersells the comparable Honda or Toyota by $1,500-2,000 and is comparable on quality, while Saturn's dealers provide unmatched customer-friendly service. So what does GM get for doing Saturn right? Well, the car mags knock Saturn for fits and finishes, the wide gap on the plastic body panels (to accommodate greater expansion and shrinkage due to heat), and a noisy engine. I grant the noisy engine, but it's not THAT loud and is not an issue with me.

What I don't know, however, is whether GM makes money on Saturns. When you are spotting the competition a couple of thousand on every car due to labor costs, something has to give. GM and Ford have to get their costs in line to survive. I think the message is sinking in, even in the union, and I just hope it's not too late.

In the 1970's and 80's, the Steelworkers quite deliberately sacrified three quarters of the jobs in the U.S. steel industry to protect the pay and benefits of the high-seniority survivors. There are people in the UAW with the same attitude. If that doesn't change, GM and Ford don't have a chance.

[Roland99]

34. Anyone else hearing echoes of Ross Perot right about now?