General Motors plans to stop producing some of the mid-sized sedans for the North American market and the Chevy Volt is among the casualties of the strategic shift. News from the multinational company is that it will stop producing the Volt from 2019 as part of its plans to do away with all its brands that are not doing well in the market. The planned discontinuation of the production of the Volt is expected to cut down the company’s salaried employees by almost 15 percent. Over the years, General Motors has exhibited a tendency of terminating the production of some of its models based on a number of reasons. For the discontinuation of the Volt, the motivating factor is cutting down the operational costs. Ensuring that production of the Volt is brought to a halt will give the manufacturer the opportunity to streamline its production processes and drive it towards the development of vehicles with zero-emissions.
General Motors first sold the Volt as the first plug-in car in North America where it made its entry into the market in 2010. Since it was introduced into the US market, the Chevy Volt has always struggled to attract buyers with more people preferring to buy the pure electric cars such as the electric cars from Tesla and the Chevy Bolt EV. GM expects the sales for the Volt to decline steadily as the model’s $ 7,500 credits expire next year. Since most of the credits went to the Volt, it seems that the manufacturer is taking the opportunity to eliminate the model from the market as part of its restructuring. The move is likely to spark various reactions from different stakeholders with the affected employees likely to offer some resistance to the move.
Many people have questioned the decision by General Motors to stop producing the Volt for a number of reasons. To begin with, the vehicle has never lost its efficiency since its introduction into the market. For instance, the Volt has made it to the Green Car Reports highlighting it as one of the best plug-in electric and hybrid vehicles in the market. GM explained that one of its oldest manufacturing plants at Detroit-Hamtramck where the Volt is currently being built will cease its production activities. The company has not scheduled to use the plant to manufacture any other models hence the decision to have it closed from 2019. This move could signal the imminent death of the Chevy Volt. Even with the firm referring to such plants as idle, it is obvious that most of the people working there have contrary opinions.
General Motors first introduced the Volt into the market in 2010 with plans made to give the model a facelift in 2020. Although the manufacturer has indicated that it will terminate the production of the mid-sized sedan, it is unclear how such pronouncements would affect the introduction of the crossover/SUV based Volt that was scheduled for release in 2020. It is also unclear whether GM will continue with the production of a crossover/SUV based Volt or it will terminate the plans altogether.
According to the estimates from the firm, it is expected that the company will get rid of about 15 percent of its salaried workers by discontinuing the production of the Volt and other scheduled brands. General Motors also expects that about a quarter of its employees who work under the contract will also lose their jobs and this will enable the company to cumulatively save about $ 6 billion. It seems justifiable for the manufacturer to discontinue the production of the mid-sized sedans since their market share has been dropping over the years. The company reported an overall 12 percent drop in the sale of its mid-sized sedans while the number of crossovers and SUVs sold increased. From the statistics, it seems that a majority of the buyers in United States prefer crossover models and SUVs to the traditional mid-sized SUVs.
Although the manufacturer has already decided to close down what it terms as ‘idle plants,’ the exercise is far from over since there is no agreement between the company and its employees. The negotiations for the expected retrenchment of employees next year is still underway and a deal is yet to be reached. One of the negotiators in the conflict is Canada’s Unifor Union that represents workers who have been working for General Motors. The organization advocates for a majority of the workers in Oshawa plant, which is scheduled for closure next year. The organization’s officials released a press statement in which they promised to fight for their member’s right to the end by ensuring that the plant is not closed down. The disagreements between the firm and the union, therefore, are likely to affect the firm’s approach to the issue.