automotive sector in united States has a long journey to to adapt to the ideas of Donald Trump has in his mind. The leading manufacturers of the country are already aligning their business strategy to “in part” to give pleasure to its president and by another part so that the accounts are not desboquen. With this premise in the minds of the leaders of FCA, General Motors and Ford Motor are already working to to convert the united States into its centre of operations main.
General Motors has in the american continent (throughout the whole), their primary market, and also to please Trump also has to bring joy to other countries. Has therefore decided to move part of the production of the Chevrolet Equinox of your current factory CAMI in Ingersoll (Ontario, Canada) to some of those that are in Mexico. This measure will bring about a lowering of the productive capacity of the factory and with it the dismissal of around 600 employees and the doubt about the future of this factory.
The decision of General Motors is being very reviewed in the country as the information on its reason for being are contradictory. On the one hand, Unifor Local 88 (the majority union in the plant) speaks of that the decision has been taken, and only taking into account economic criteria. The reason they give is that the workers of Mexico charge much less and therefore the benefit of the company, will be much higher.
on the other hand, the version of the facts of General Motors is different. According to the company, the decision to move the production of this model to Mexico has been due to the fall in sales of the model. It is true that in the past year to 2016, sales of the Chevrolet Equinox fell about 13 per cent to 2015 and in total sold 242,195 units.
however, it is not less true that we are talking about the previous generation of the model and was therefore in his decline commercial. With the arrival of new generation sales should be traced and it would not be necessary to lay off 600 workers, or outsourcing part of production to Mexico. All this corroborates that this segment of the market has proven that is growing, so that the justification of the trademark is contradictory.
Be that as it may, it is very likely that this strategic move is related to the profitability of the company. If the cost of the labor of your factory mexican is less than the canadian the profit per unit would increase. This would help General Motors to have a low-cost mattress increased by if things Donald Trump is complicated and have to cope with taxes and tariffs.
time will tell if this movement, they are correct.
Source – Unifor Local 88