GM restructuring will close factories

Americans have fallen out of love with sedans, so Detroit is dropping them as fast as it can.  

General Motors became the third domestic automaker to move away from sedans, saying Monday that it will stop making six models as it bets its future on the more popular pickup trucks and SUVs, as well as electrified and autonomous vehicles.

The cars that are going away include a couple of GM’s pioneering models: the Chevrolet Volt, which was the automaker’s first plug-in EV hybrid, and the Cadillac CT6, which was the first car to use the Super Cruise partially automated driving system.

Other models going away include the Cadillac XTS large luxury sedan, the Chevrolet Cruze small car, the Chevrolet Impala large car, and the Buick LaCrosse large luxury sedan.

If you own one of the discontinued models, don't fret. Parts, repair, and service should be easy to get for years to come, a Consumer Reports expert says.

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GM isn't the only one refocusing its product line. Ford announced earlier this year that it was dropping most of its sedans, except for the iconic Mustang, as it focuses on trucks and SUVs.

Fiat Chrysler Automobiles dropped the Chrysler 200 and Dodge Dart small cars in the summer of 2016, saying it would focus on larger, more profitable vehicles.

Sedan sales are down because consumers enjoy the versatility and seating position they get from riding in SUVs, says Jake Fisher, director of auto testing at Consumer Reports.

“As baby boomers and Generation X drivers get older, they like how easy it is to get into an SUV vs. having the drop down to get into cars,” he says.

GM says it will focus on vehicles that will use its “next-generation battery-electric architectures.” It says that resources allocated to electric and autonomous vehicle programs will double in the next two years.

What Owners Should Do

You'll still be able to service your car if you own one of these models. GM, like many automakers, shares many parts among its vehicles. In fact, GM shuttered Hummer, Oldsmobile, Pontiac, and Saturn over the last decade, and there are still plenty of parts available for those vehicles.

“Some of the body parts may be affected for short periods of time,” says Mel Yu, CR automotive analyst, “but major components are mostly shared with other models and will be continuously produced.”

In addition, he says, owners should be able to get their cars repaired at Buick, Cadillac, and Chevrolet dealerships well into the future, even after their car is no longer being produced.

GM restructuring will close factories, affecting the Chevrolet Impala

Why Is This Happening Now?

The domestic automakers have a long legacy—and a lot of sales success—with trucks, says Ed Kim, vice president of industry analysis at AutoPacific, and many import brands have lots of sedan history and heritage.

“While sales of stalwarts like Toyota Camry and Corolla are declining, they still represent massive volume,” Kim says.

Sales of the Big Three’s sedans have taken a proportionally much bigger plunge because they haven’t been as popular. Because of that, the Asian brands aren’t in a rush to abandon cars.

“They’ll just own the sedan space even more than they do now,” he says.

Also, Kim notes, it looks like GM is trying to be ready for any possible downturn in the economy. The automaker went through a painful bankruptcy in 2008 and likely doesn’t want to repeat that experience, he says.

“Keep in mind that everything we have seen from GM, post-bankruptcy, has reflected a level of foresight and proactive behavior that is completely unlike the old GM,” he says. “The culture is much more forward looking than it has ever been in recent memory.”

And all automakers are looking to maximize returns, says Joe Langley, associate director of vehicle forecasting for IHS Markit, an industry analysis firm. Ultimately, he says, “every vehicle has to stand on its own merit. If a vehicle is losing money by just turning on the lights, then it’s got to go.”

Last, this is one result of the ongoing battle over tariffs, Kim says. The company has said that tariffs on imported steel have cost it $1 billion.

“As GM, like most other automakers, is a truly global operation, the tariff wars are having a detrimental impact on its business,” he says. “This is another factor behind GM’s changes, and they hurt American jobs in the process.”

GM restructuring will close factories, affecting the GMC Sierra
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