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Good News/bad News Auto Production Down -impact On E???

RUCRAYZE

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Long story, but worth the effort I think- I've edited out political commentary- Read all at NYT July 4 Business section

After Years of Growth, Automakers Are Cutting U.S. Jobs


By BILL VLASICJULY 4, 2017


The decline signals at least a pause in Detroit’s resurgence from the dark days of the financial crisis, which General Motors and Chrysler survived only through bankruptcy and bailouts. It’s happening despite President Trump’s promises to pressure automakers to save and create good-paying American factory jobs.

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Workers at the General Motors assembly plant in Orion, Mich., listening to Mary Barra, the chief executive. Employment at the nation’s auto-assembly plants is down more than 2 percent this year. CreditRebecca Cook/Reuters
Industry analysts said consumers might be pulling back on spending because of tighter credit conditions and more expensive vehicle loans. “Higher interest rates and uncertainty around fiscal policies will slow economic growth, and may become headwinds for auto sales,” said Charlie Chesbrough, an economist for the research firm Cox Automotive.

The impact on employment is uneven, however, reflecting the evolving tastes of American car buyers.

With low gas prices motivating buyers to trade in traditional cars for larger models, factories making trucks and sport utility vehicles are humming, with some producing around the clock on three shifts. Even as overall vehicle sales declined in June, sales of trucks and S.U.V.s rose about 4 percent from a year earlier.

Auto Sales Are Slowing
Sales are falling after a period of strong industry profits.
million
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5
0
17.0 million
2008
2010
2012
2014
2017
Seasonally adjusted annual rate
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Source: Bureau of Economic Analysis, via Federal Reserve
That consumer trend is playing out in the opposite direction at plants building small and midsize cars, which are scaling back or shutting down entirely while they are converted to produce trucks and S.U.V.s.

What none of the automakers are doing is building new plants or adding a significant number of new jobs anytime soon.

“The industry has dramatically expanded employment in the United States in the last several years, but the growth is just not there anymore,” said Harley Shaiken, a labor professor at the University of California, Berkeley.

And companies are increasingly looking to build their less profitable car models outside the United States. Ford Motor, for example, said in June that it would move production of its Focus sedan to China from Michigan.

The company had previously planned to move the car to a new plant in Mexico, but canceled the project after meeting stiff opposition from Mr. Trump.

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Workers in the body shop of the Ford plant in Hangzhou, China. Ford said in June that it would move production of its Focus sedan to China from Michigan. CreditGiulia Marchi for The New York Times
Ford’s China move will not cost any American jobs, because Focus production in Michigan will be replaced by trucks and S.U.V.s.

But the decision could inflame trade tensions. And if falling sales over all in the United States continue to cut employment in American plants, it could spur protectionist measures by the Trump administration, like imposing border taxes on imported vehicles.

Scaling back jobs in car plants is part of a newfound discipline among automakers to avoid bloated payrolls and inventories when sales start slipping.

Auto Manufacturing Employment
Slowing auto sales mean fewer auto factory jobs.
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0
206.3 million
2008
2010
2012
2014
2017
Not seasonally adjusted
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Source: Bureau of Labor Statistics
That is a big change from pre-recession times, when the domestic automakers were too often awash in overproduction, or saddled with union contracts that funneled idled workers into so-called job banks with nearly full pay and benefits.

That program was eliminated in subsequent labor pacts with the United Automobile Workers. Moreover, the Detroit companies have also hired large numbers of lower-wage, entry-level employees with less costly unemployment benefits.

Those moves have made it easier for the companies to scale back production based on changes in the market.

G.M., for example, has reduced the number of shifts at several of its domestic plants, the most recent reduction being its announcement of cutbacks at a factory in Kansas that makes the Chevrolet Malibu midsize sedan — a segment that is rapidly declining as more buyers gravitate to S.U.V.s.

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A General Motors assembly plant in Kansas City, Kan., which makes the midsize Chevrolet Malibu sedan. G.M. recently announced cutbacks there. CreditOrlin Wagner/Associated Press
“These decisions are always tough,” said Alan Batey, the president of G.M.’s North American operations. “But at the end of the day we have to be disciplined about our production plans.”

Fiat Chrysler, for its part, has eliminated production of compact and midsize cars altogether at factories in Michigan and Illinois, temporarily laying off workers as it retools the plants to produce S.U.V.s and trucks.

About 4,200 employees at the company’s factory in Belvidere, Ill., recently returned to work after being temporarily laid off several months ago, and will begin producing a new S.U.V. model at the plant later this month.

The bright spots in the overall employment picture are the expansion of production at niche automakers like the electric-car company Tesla, and by foreign car companies including BMW, which is adding jobs at its sole United States plant, in South Carolina.



And automakers are hopeful that sales of larger vehicles will get even stronger in the remaining six months of this year, as has been the case in previous years. “Seasonal factors drive a much higher retail mix of trucks and utilities in the second half of the year, so it makes sense to make production adjustments on the car side,” said James Cain, a spokesman for General Motors.

But few in the industry expect any major job growth anytime soon. G.M., for example, recently scaled back its projections for industry sales in the second half of this year, and analysts are predicting that annual sales will fall below 17 million vehicles next year for the first time since 2014.

“We are beginning to enter a period we call the post-peak,” said Jonathan Smoke, chief economist for Cox Automotive, which operates the auto-research sites Kelley Blue Book and Autotrader.

One factory that thrived after G.M.’s bankruptcy in 2009 was its small-car plant in Orion Township, Mich., north of Detroit.

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The General Motors plant in Orion, Mich., is down to one shift of workers, with little hope of expanding production soon. CreditRebecca Cook/Reuters
The company invested more than $500 million to refurbish the factory and begin producing subcompact cars. Last year it added production of its new battery-powered Chevrolet Bolt.

But demand for small, ultra-fuel-efficient cars has waned drastically with lower fuel prices. Despite its modern production technology, the Orion plant is down to one shift of workers, with little hope of expanding production soon.

Workers at the plant were heartened this year when G.M. added a small operation to convert Bolts into autonomous vehicles for testing purposes.

While it hardly added any new jobs, the autonomous-vehicle project was a welcome addition to a plant operating at well below capacity. “It’s great to be a part of a product launch — even if it is a small one,” said Lindsi Green, one of a handful of employees working on the self-driving prototypes.
 

Watashiwah

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This looks like a big plus, and great opportunity, for Elio Motors. Regardless of the biggies scaling back smaller car production, there will always be that need. Elio allows the consumer that still needs a small, efficient, more personal vehicle to more inexpensively have all that and now focus on the specific positives in a smaller field of competition; it will, ironically, help the consumer better rationalize that big fuel hog, while they still need a "get around" vehicle. Woe to the peeps that now buy in to the big cars when the petroleum price pendulum swings the other way...
 

NSTG8R

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Appreciate you posting this article, RU. But it does show how their data is cherry picked to fit their narrative. The GM plant just down the road from me in Wentzville, MO just hired another 350 people and added a third shift. And a Ford plant near Kansas City, MO is doing fine kicking out F-150's.
 

BilgeRat

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I see hope for Elio in their commentary about tighter credit and more expensive loans, and the fact that small vehicle production is looking to go away. That can't be anything but a good thing for a small affordable vehicle built here.

NSTG8R, they did mention in the article that big vehicle sales were up 4% from a year ago, and that some plants were adding a third shift.
 

NSTG8R

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I see hope for Elio in their commentary about tighter credit and more expensive loans, and the fact that small vehicle production is looking to go away. That can't be anything but a good thing for a small affordable vehicle built here.

NSTG8R, they did mention in the article that big vehicle sales were up 4% from a year ago, and that some plants were adding a third shift.

Hmmm...Didn't read the "actual" article, just the above edited version RU posted. Didn't see anything suggesting hiring more people and adding an additional shift. Might have to get the full version up later today and give it a read.
 

RUCRAYZE

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and.....
ENERGY & ENVIRONMENT
Volvo, Betting on Electric, Moves to Phase Out Conventional Engines


By JACK EWINGJULY 5, 2017

Continue reading the main storyShare This Page
  • The decision is the boldest commitment by any major car company to technologies that currently represent a small share of the total vehicle market but are increasingly viewed as essential to combating climate change and urban pollution.

    While most major automakers offer hybrids and battery-powered options, none of them have been willing to forsake cars powered solely by gasoline or diesel fuel. On the contrary, United States automakers have continued to churn out S.U.V.s and pickup trucks, whose sales have surged because of relatively low fuel prices.

    Yet Volvo’s move may be the latest sign that the era of the gas guzzler is slowly coming to an end. Tesla, which makes only limited numbers of electric cars, surpassed Ford and General Motors this year in terms of stock market value, despite making significantly fewer cars than those automotive giants — a clear indication of where investors think the industry is headed.

“Our customers are asking more and more about electric cars,” Hakan Samuelsson, the chief executive of Volvo, said in a telephone interview on Wednesday. While Volvo’s strategy has risks, Mr. Samuelsson acknowledged, “a much bigger risk would be to stick with internal combustion engines.”

Though based in Sweden, Volvo is owned by Geely Automobile Holdings of China, which already produces battery-powered cars for the Chinese market. The decision by Volvo to focus on electric vehicles could ultimately give it and Geely a head start if, as many analysts expect, sales of battery powered cars begin to take off. China is already the largest market for electric vehicles.

Volvo’s battery-powered vehicles will be produced initially in China, but eventually also in Europe and at a new factory the company is building near Charleston, S.C.

Hybrids, which combine battery power with gasoline or diesel engines, accounted for about 2 percent of passenger car sales in the United States last year, a number that has been declining because gasoline prices have fallen.

And cars that run solely on battery power are still rare in most countries because of high purchase prices, lengthy charging times and limited ranges.

Still, most carmakers expect the share of electric cars to grow quickly as the technology improves, prices fall and public charging stations become more commonplace. Rapid advances in self-driving cars will also encourage a shift to battery power: It is simpler to link self-driving software to an electric motor than to a conventional engine.
 

pistonboy

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My conclusion is that with the lower gas prices, people are buying cars for "fun" and less for "economy".

I believe EM should fix an Elio up in a very sporty paint design with mag open wheels and diagonal coil over shocks. Then show this off as what can be done with an Elio. In advertising, it is always important to grab people's attention.

Paul is an engineer and we engineers tend to be stodgy and practical and that definitely is not currently selling.
 
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