Why is GM closing the plants and dropping car models?

The Chevrolet Malibu is an enduring classic that helped launch the midsize sedan segment more than 50 years ago. It drives into the future with an all-new 2016 model engineered to offer more efficiency, connectivity and advanced safety features than ever – all with a brand-new, progressive design.

I answer a lot of questions on Quora. Many of those questions are about automotive things that may be of interest to CarNewsCafe readers. Like this one.

Why is GM closing the plants and car models they are closing?

My Answer: General Motors stopped production on several car models because the market for those cars in the United States and Canada has been falling for some time. As the market shrinks, so do sales and profits in that market. Pulling the plug here made financial sense. Most of those vehicles, which are global platforms, are still being made/sold under various names in Europe and Asia.

The plants being closed was a second financial decision. GM was overextended with manufacturing capacity. Which means they had too much production for the amount of vehicles being sold regionally. Closing plants was the solution. It costs a lot of money to keep an automotive plant shuttered, but a lot more money to keep it operational without seeing much production or profit from it. Some of those plants may be overhauled and recommissioned later, others may be leased or sold to other automotive manufacturers. Others might just sit empty until they’re finally torn down.

GM’s closures are a harder hit than were the changes made in the Fiat-Chrysler and Ford manufacturing, which largely just reduced production at some facilities and discontinued certain models for reasons similar to GM’s. Ford, for example, reduced production at a few facilities and is revamping its model line in favor of crossover-SUVs. Fiat-Chrysler did the same, replacing production for car models that weren’t selling well with Jeep models that are.

Aaron Turpen
An automotive enthusiast for most of his adult life, Aaron has worked in and around the industry in many ways. He is an accredited member of the Rocky Mountain Automotive Press (RMAP), the Midwest Automotive Media Association (MAMA), the Texas Auto Writers Association (TAWA), and freelances as a writer and journalist around the Web and in print. You can find his portfolio at AaronOnAutos.com.