Will GM Plan Be Short-Term Pain and Long-Term Gain?

Posted: Updated:
Parker says Fort Wayne's GM plant is positioned well because of its product mix. Parker says Fort Wayne's GM plant is positioned well because of its product mix.
INDIANAPOLIS -

While a massive reorganization announced last week by General Motors Co. (NYSE: GM) will mean pain in the form of five plant closures and the elimination of 14,000 jobs, an Indiana University Kelley School of Business professor says it was long overdue and should pay dividends for the automaker.  The GM plan, which includes the elimination of six passenger car models, is in response to a massive consumer move away from cars to trucks, SUVs and crossovers.  “I think for a long time they have been using incentives to push their money-losing vehicles and now finally they have bitten the bullet and I think it’s past time,” said Rodney Parker, associate professor of operations at the Kelley School.

In an interview for this weekend’s edition of Inside INdiana Business with Gerry Dick, Parker said Fort Wayne’s GM Truck Plant should be positioned well because of its product mix.

Parker notes that the six models GM is eliminating sold a combined 200,000 units through the first nine months of 2018.  By comparison, the Chevrolet Silverado alone sold about 424,000 units during that same period.  The Silverado is produced in Fort Wayne.

The migration of consumers from cars to trucks, SUVs and crossovers has been gaining momentum for the past decade. In 2008, the market was approximately 50 percent cars and 50 percent trucks, SUVs and crossovers.  Today, the larger vehicles command about 65 percent of the market and growing.  “Consumers have spoken with their feet and GM has been losing money on passenger cars for a long time,” said Parker.

Parker also noted that non-GM assembly plants in Indiana---Subaru of Indiana Automotive in Lafayette, Toyota Motor Manufacturing Indiana in Princeton and Honda Manufacturing of Indiana Inc. in Greensburg---all have product mixes in line with consumer demand.

  • Perspectives

    • Owe Taxes? What Went Wrong in 2018 and How to Survive It

      The 2018 tax filing deadline came and went. Whew! But for some Americans, the tax headache has just begun. This year was the first filing under the Tax Cuts and Jobs Act and while some taxpayers saw larger refunds others received a rude awakening. If you’re reeling from a large tax burden, this article is for you. The Root of the Problem Remember how excited you were when you received your first paycheck—followed by dismay when you saw how much was taken out for taxes.

    More

Subscribe

Name:
Company Name:
Email:
Confirm Email:
HTML
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections
INPower
Subscribe
Unsubscribe

Events



  • Most Popular Stories

    • GPC is a subsidiary of Kent Corp.

      Ag Manufacturer Begins Expansion

      Iowa-based Grain Processing Corp. has broken ground on an expansion project in Daviess County, which has been more than four years in the making. The company is investing $70 million to expand its Washington plant, which could create up to 20 jobs when complete.

    • Should My Family Office Be Concerned About Cybersecurity?

      Data breaches are constantly in the news and most companies know they should be concerned about privacy and the security of their data, or at least recognize this is an important and complex area.

      However, most family offices are not sure how to start addressing their concerns, or worse, don’t view the family office as a target. The majority (58%) of malware attack victims were categorized as small businesses in 2018.[i]

    • Bosma Enterprises Hires Chief Strategy Officer

      Bosma Enterprises has added Jay Geshay as its new Chief Strategy Officer. Geshay will be an active participant in making strategic decisions for Bosma Enterprises and the Bosma Visionary Opportunities Foundation, and will be responsible for developing and executing strategic initiatives for our company. He previously was director of Impact Indiana and was also a Senior Vice President at United Way of Central Indiana. 

    • The Landing project involves redeveloping seven buildings and two parking lots into a mixed-use development.

      New Restaurant Concept Coming to The Landing

      The developers of a $34 million redevelopment project in downtown Fort Wayne have announced a new partnership. Cincinnati-based The Model Group says it is working with Cunningham Restaurant Group to bring a "new and unique" restaurant experience to The Landing.

    • McCloskey Appointed to IEDC Board

      Governor Eric Holcomb has appointed Fair Oaks Farms co-founder Sue McCloskey to the Indiana Economic Development Corporation Board of Directors. "To continue taking Indiana's economy to the next level, we need the experience and perspective of key industry experts like Sue McCloskey. She knows firsthand the challenges and opportunities faced by Hoosier entrepreneurs and agriculture businesses,” said Gov. Holcomb.