The automotive sector in United States ahead a long way to adapt to the ideas that Donald Trump has in mind. The leading manufacturers of the country are already aligning its business strategy to “partly” give its President and on the other hand taste so accounts are not desboquen. With this premise in the mind of the leaders of FCA, General Motors and Ford Motor already are working for convert to United States in its center of operations main.
General Motors has its main market in the Americas (in whole) and in addition to content to Trump also has brighten to other countries. Therefore it has decided to move part of the production of the Chevrolet Equinox in its current factory of CAMI in Ingersoll (Ontario, Canada) some of which are in Mexico. This measure will bring a reduction in the productive capacity of the factory and the dismissal of about 600 employees and doubt about the future of this factory.
The decision of General Motors is being very talked-about in the country since information their raison d ‘ être are contradictory. Unifor Local 88 (the majority Union of the plant) speaks on the one hand, that the decision has been taken only and exclusively taking into account economic criteria. The reason they give is that workers in Mexico charge much less, and therefore the company’s benefit will be much greater.
The version of events of General Motors , on the other hand, is different. According to the firm, the decision to relocate the production of this model to Mexico has been due to the fall in sales of the model. Certain is that in the last year 2016 the sales of the Chevrolet Equinox fell a 13 per cent regard to 2015 and in total sold 242,195 units.
However, it is not less true that we are talking about the previous generation model and it was therefore in its commercial decline. With the arrival of the new generation sales should go up and would not be necessary to lay off 600 workers or relocate part of production to Mexico. This corroborates everything that this segment of the market has proven to be that more is growing, so the justification of the mark is contradictory.
Be that as it may, it is likely that this strategic move is related to the profitability of the company. If the cost of the labor of its Mexican factory is less than the Canadian earnings per unit would be increased. This would help General Motors has to one greater economic mattress if Donald Trump things get complicated you and have to deal with taxes and duties.
Time will tell if this movement are correct.
Source – 88 Local Unifor