Plant closings have been the norm for the American auto industry these past few years, and more are most likely on the way. An annual survey conducted by accounting firm KPMG shows that 88% of top industry executives feel that North America has too many auto plants, and despite all the recent closings, the 200 top execs surveyed feel that over capacity is a bigger problem now than in the past.
GM said last year that as part of its bankruptcy process they would cut 12 plants and Chrysler said they would be closing four. Closings have not just been isolated to those two however, as Ford announced closings of its parts plants, and even Toyota has closed a North American plant and delayed work on another.
It is estimated that plant closings have cut North American capacity by about 1.5 million vehicles, down to 18 million in ’09; U.S. auto sales for the same period were 10.4 million units, and many estimate that it will take multiple years for the market to bounce back to the 16.7 million annual units sold that it was at ten years before the recession hit.
The ’09 closings represent only the most recent wave of plant closings and employment at U.S. auto plants has fallen by more than 50% since 2000, despite foreign automakers establishing plants here.
– By: Stephen Calogera