Tesla No Longer Interested In Shuttered GM Factories

JAN 12 2019 BY MARK KANE 109

Tesla was interested in GM’s facilities, but without UAW involvement.

General Motors‘ move from cars to trucks and SUVs will result in several unallocated plants in the U.S. later this year. If the company does not find buyers, the plants will be closed.

According to the latest news, Tesla is not interested in the GM’s facilities because keeping UAW organization would be part of the deal. Elon Musk hinted at the possibility of purchase in December.

“GM CEO Mary Barra, speaking during an investor conference in New York, said there “have been conversations;” however, “Tesla is not interested in our GM work force represented by the UAW, so really, it’s a moot point.”

Tesla in on a rough path with the UAW at its Fremont factory, which is probably already enough for Elon Musk.

Assembly plants that will be unallocated in 2019 include:

  • Oshawa Assembly in Oshawa, Ontario, Canada.
  • Detroit-Hamtramck Assembly in Detroit.
  • Lordstown Assembly in Warren, Ohio.

Propulsion plants that will be unallocated in 2019 include:

  • Baltimore Operations in White Marsh, Maryland.
  • Warren Transmission Operations in Warren, Michigan

Source: Automotive News

Categories: Chevrolet, Tesla

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109 Comments on "Tesla No Longer Interested In Shuttered GM Factories"

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Not sure why we’d trust Mary Barra on this, at least not as a sure sign that talks are off.

I still think it’s unlikely that they buy any of them, I’m just not going to take GM’s word for it right now.

No, but it has been obvious all along that the major sticking point for Tesla to take on any of the factories was going to be the unions.

I respect unionisation and I support the idea of workers’ rights. And as a european, I’m amazed at how few rights American workers have. But despite all of this, I do feel that UAW have shot themselves (and their members) in the foot by being excessively aggressive toward Tesla.

+1 to both Spoonman and Spudley’s comments.
It’s not like Tesla is beaming with cash right now. Many a company has failed by growing too fast and Tesla is growing as aggressively as they can. They have a lot of capex going on with their third gigafactory in China and it would be wise to build the next one in Europe. Of course, if the stars aligned just right that could be altered by picking up a GM plant, but honestly, it would be better to wait and buy the gutted building as they did in California and then hire back some GM workers. I like Marry Barra and might have made the same comment if I were in her shoes, still it is quite Trumpian to shut down a plant and then criticize someone else for not hiring the workers you just dismissed.

UAW shot themselves in the foot long before Tesla. Foreign carmakers almost exclusively built factories away from the UAW/IBEW strongholds of Michigan and northern Ohio/Indiana despite the wealth of suppliers in that region. That trend started in the 1980s, and it was entirely due to the UAW’s ridiculous anti-productivity rules.

few rights? huh? Care to elaborate? _Every_ American has the same rights.

Wrong. Different states have different labor laws that result in different ‘rights’ for the worker under law in different states.

Wrong Fools

@Spudley
Please familiarize yourself with California labor laws before making broad statements.
Workers here are so well protected.

Hi Stimpacker,
I’m not fully familiar with labour law from Carlifornia and I’m not fully familiar with the labour law from all European countries (I’ve worked only in the UK and Switzerland). But I had some colleagues from Pasadena and were usually amazed that all workers get 25 days paid holidays (plus bank holidays) a year, ans sick days don’t need to be discounted from your holidays. I also had a kid whilst living in the UK and I was given 2 weeks off after the birth to be with the baby and my wife. Again I’m not familiar with California law, but those benefits are pretty hard to match.

In America and now in China I expect, a worker is a replaceable cog in a machine, not a human being and not something the company should care about the well being at all. In fact, most big companies are actively working on ways to get rid of workers, or at least replace them with something cheaper.

It’s always kind of been like that here, but in the late 20th century, the workers and middle class moved up and times were good. Now we’re slowly retreating back to the way it was in the early 20th century.

Yup. Sadly, the U.S. is now at a level of wealth inequality between the rich and the working poor not seen since the days of the industrial barons of the late 1800s and early 1900s.

In the past 30+ years of “class warfare”, the 1% have won pretty much every single battle.

So true Pull, then righties complain why there’s a trend to socialism.

Completely agree – although wealth inequality is certainly not limited to the U.S. France is in the initial stages of revolution for this very reason. Most of Europe is a powder keg.

Well, America may need one.
If so, it may not be pretty.
As it is, we ended up with Trump in big part due to such things.

US has minimum wage whereas Sweden, Norway, Finland and Denmark don’t have a minimum wage, so it depends on what you consider worker rights. The real minimum wage is always zero (ie, no job if you cost more than your wage), so Scandinavians have this correct.

Scandinavians have solid social welfare protections that resolve the same problem that minimum wage laws are designed to accomplish.

The reality is that Free Markets for Labor only function when there is a sufficient pool of unemployed and under-employed people for companies to hire from. Given this macroeconomic reality, some percent of the population WILL fall through the cracks and not earn a livable wage. The term for 100% full employment where everyone has a job is “Communism”, and no western nation has that.

Since societies only function well when people can actually live and survive, either companies need to backfill these needs, or social programs need to backfill these needs. That is called Socialism, which is practiced in Scandinavia. And if you reject socialism, that leaves either companies to fill that role, or a disfunctional society.

Making up your own definition? Socialism is government controlling the production and distribution of goods and services, like Venezuela, Cuba, North Korea. Scandinavian countries largely leave the companies to do their thing (ie, no minimum wage), which is what market economy is.

As for taxes, Corporate taxes are lower than in US. This makes Scandinavians more free market and less socialist even if you go by your definition.

High taxes on people is not socialism; for example, Scandinavians tax their poor almost 100% higher than in US (less progressive than US). This is why Scandinavians insist that they are NOT socialist countries, despite what ignorant US politicians claim.

They have hybrid economies. Healthcare, education, all taken care of. Free markets for goods and capital. I wouldn’t call them socialists or capitalists. I call them pragmatists.

The government controls the production and distribution of goods and services in a communist country, not socialist. There’s a difference.

Virtually every country practices some form of socialism; in the US, our K-12 school system, our roads, and our water/sewer systems are almost completely socialist, while our healthcare system and secondary schools are largely market based. The mix is different in different countries.

It’s amazing to see how the words “socialist” and “socialism” are being redefined in the US of lately. I used to to study these things in school years ago and has kept an interest ever since.
Please be aware that socialism is not only an idea of governing practice, but also very much about business ownership. Also the fine line between socialism and communism is that the latter is about controlling all aspects of capital flow in a society through central planning.
So socialism is political ideology. However loosely defined these days. Please do not confuse it with public funding.

“Making up your own definition? Socialism is government controlling the production and distribution of goods and services, like Venezuela, Cuba, North Korea.”

So, you’re trying to redefine a totalitarian state as “socialism”. Some totalitarian states, such as the USSR and North Korea, have also labeled themselves as “republics”, and that’s just as much a lie as calling themselves “socialist”.

The UK and various other European nations are socialist democracies. And they’re about as far away from being ruled by a totalitarian dictator as the U.S. is… the ongoing efforts of the Orange One and his organized crime syndicate notwithstanding.

Righties trying to redefine labels

Those countries call themselves socialists. It is YOU who’s redefining the labels.

I believe they’re actually welfare states rather than socialist democracies. I can’t see the Conservative Party governing a socialist country! 🙂

If someone continue to call you gay despite you saying that you’re straight, that’s an insult. Scandinavian minister said in press conference that they’re not socialist countries, yet you and other left wingers continue to insult them.

Those are communist countries

They call themselves socialists.

THAnks Nix

Those countries are socialist countries. If you can’t get what is near fair market or wage earner income the government will help with the rest

Agree

Many of the unions here have become overrun with mafia. UAW is just one of them (teamsters STILL has mafia control).

I’ve suggested several times to elon that he really needs to create a union for tesla employees, but stop them from working with others.

I read Elons reply re GM factory as a politely said: Not really, man.

Well you can look back at Eastern Airlines flight with the Machinist Union causing Eastern Airlines to go bankrupt.
Pullman Standard stopped building train cars and went bankrupt because of the Union.
I don’t blame it all on the union but unions don’t seem to understand the economics involved in running a company. Shareholders finance, Management vision, and Unions labor.
Unions aren’t the only one to blame. All three look at short term gains rather than having a long term plans.
Steel mills in the US had 90% market share after WWIi but Management refused to invest in the new type of steel mills being built in Europe that were cheaper to build and produced 4 times more steel a day for less money.

If they can only stay in business by underpaying employees and having them working in sub par conditions I’m not sad to see them go. Jobs that don’t lead to a sufficient retirement fund are subsidised by the tax payer and shouldn’t exist.

“Underpaying”? This isn’t the 1880’s and they aren’t the company store. You don’t like your pay? Quit and find a better job. The fact that the employees are staying put shows that they are not in fact underpaid.
For better or worse, the company pension is gone in the US. You have to take care of your own retirement, though Social Security will be a supplement to your own savings.
Employees aren’t children, nor are they vassals. They are adults and individuals who are responsible for their own choices. It is called free will. Exercise it or pay for your own failures.

In a one company town people obviously stay as long as possible to pay off their mortgage and keep their kids in school.

Whether or not you “like your pay” is largely irrelevant. In a society with a functional safety net, when companies don’t pay their employees enough to make a living, the taxpayers make up the difference (with food stamps, free school lunches for children, housing assistance, etc.).

So the upshot of your position is that corporate executives take home even more money, while you and I pay more in taxes so that we don’t have American children going to bed hungry or homeless. This is not what I would call an optimized arrangement.

Pension are incentive to keep people and to bring people to work productive lives for your company. Cousins dad was union and love ford to death because they took care of him and vice versa

There are plenty of non-union auto factories in the US South which provide good wages and working conditions that exceed Detroit’s.

there are accidents in union plants too. Not sure what your point is.

While I worked in Oshawa’s south GM plant I saw two major accidents in front of me. One was caused by a stupid worker who did not make sure the lift hooks were on an engine properly. Later the engine slipped, and an employee by reflex tried to catch the engine – ruined his back.

The company did not cause the accident, the worker on what was a slow line got lazy about placing the hooks was the cause.

The other accident I did not see the cause. But an union does not mean no accidents.

I always found it fascinating the argument that companies don’t care about the workers. Unless any homeless bum can do the job, the workers were selected through costly process as well as experience and training. It’s in company’s best interest to keep them in healthy working shape even without unions.

I always make it a point to keep the people who work under me happy and well. It is not only good for them, but far more beneficial to me and even more beneficial to the company, short and long term.

“I always make it a point to keep the people who work under me happy and well.”

That’s pretty much word-for-word what Southern plantation owners said when defending slavery.

“…the workers were selected through costly process as well as experience and training.”

That describes the slave market, too.

It’s amazing how people are able to rationalize almost any actions, no matter how unfair or unjust.

Pushmi, that is just uncalled for and illogical to boot. Keeping your employees happy is in no way similar to how slave owners treated or spoke of treating their slaves. It isn’t in the same universe and the fact that you think employers keeping their employees happy and well is akin to slavery in any way says more about your mindset than it does about modern employers. I have read your comments for years and agree with you more often than not, but that comment was just ill informed. I was just at the Lincoln Memorial a few minutes ago and re read Lincoln’s Second Inaugural Address. It closes with: ” Fondly do we hope, fervently do we pray, that this mighty scourge of war may speedily pass away. Yet, if God wills that it continue until all the wealth piled by the bondsman’s two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said “the judgments of the Lord are true and righteous altogether.” With malice toward… Read more »

Never mind PuPu. He’s so filled with left wing hate that he wants people to be whipped and worked to death. He plainly says so.

“…the fact that you think employers keeping their employees happy and well is akin to slavery in any way…”

That’s a “fact”?!? No, it’s a fallacy on your part; the
fallacy of over-generalization. I wasn’t talking about employers in general, I was talking about Sparky and his extreme class warfare attitude towards the working class, a class which in previous posts he has repeatedly described as filthy, disease-carrying vermin with disgusting personal habits.

And now here he’s talking just like an antebellum plantation owner about “his” workers.

So PuPu, you treat people badly and whip them to exhaustion and work to death? Why doesn’t it surprise me that you’d abuse people knowing how left wing you are.

The plural of anecdote is not “data”, and sensationalized stories based on rare outlier incidents may generate a lot of heat and outrage, but very little light on a subject.

As Oscar Wilde said: “Everything in moderation, including moderation.” The UAW is an object lesson in what happens when unions get too strong; so strong that over-compensation for UAW workers was a major force contributing to GM going bankrupt (or more precisely, having to be bailed out to avoid bankruptcy).

That doesn’t mean it’s bad to have strong laws protecting workers’ rights, or that there shouldn’t be collective bargaining. But unions which get too strong, like the UAW, are ultimately about as bad for workers as no unions at all, because they’ll become such a bloated parasite on both businesses and workers that they’re a dead weight dragging down the entire economy.

But you are also talking about southern states that take more from the Fed than they pay in. So pretty sad you have whole states that are welfare states while claiming your non union labor is blessed.

Bunny, The Southern States are not welfare states. California has by far the largest portion of welfare anywhere in the Country. The fact that some of the States get more Federal funds that they put in also accounts for Military bases, Federal buildings and a myriad of other things that have nothing to do with Welfare. Plus if you really want to get down and dirty in those Red states the vast majority of the welfare goes to the large blue cities run by Democrats.

The “large blue cities,” with all of the welfare they supposedly receive, still generate more federal money than they take. The same cannot be said for the red states.

And yes, the decision on which military bases to keep open and where to construct new federal buildings is a form of welfare. Because without those military bases and federal buildings, many of these red states would have virtually no economic activity at all. It is a gift from the federal gov’t, meant to prop up the economies of areas that otherwise have little to contribute.

It isn’t supposedly it is actual. The vast majority of the welfare recipients are clustered in the blue areas of the cities that have been run by Democrats for years.

In California welfare spending exceeds $103 BILLION dollars which is vastly more than the second state of New York at $61 BILLION. With businesses fleeing from the blue states to the Red and the ever increasing entitlements like free healthcare for illegal immigrants that both California and New York City just announced the blue welfare states will just continue to grow.

Population of New York (2017): 19.5 million

Population of California (2017): 39.6 million.

Repeating the same falsehood over and over doesn’t make it any more true, Recoil.

New York City and California are growing. Upper NY State is dying. What’s your point

“California has by far the largest portion of welfare anywhere in the Country.”

Finish the sentence: “…because that State has by far the largest population of any State in the country.”

Measure it on a per-capita basis, and California is a sizable net contributor to Federal taxes.

“Figures don’t lie, but liars do figure.”

Yes and those 2 blue states take the largest portion of welfare in the entire country.

The point is that it’s mostly Red states which are net beneficiaries of welfare; Blue States — including both California and New York — are net contributors.

And none of your attempts to sidetrack the discussion are going to alter that reality.

California also has the largest amount of people on welfare. It also has some of the largest income inequality in the states and has been ranked dead last in quality of life. It also is the NUMBER 1 in poverty. California has had some of the largest cities to declare bankruptcy, has the highest taxes in the nation and nearly 1 TRILLION in unfunded pensions. BTW California has been run by democrats for 40+ years. These figures don’t lie.

Poor is not poverty here in the US compare to the world

Southern States are welfare Queens and corporate welfare kings

you forgot, no healthcare and benefits too.
That’s why they declare bankruptcy, so they can RAID worker pension funds.
You’d think that would be ILLEGAL, but Republican Judges don’t.

Also, I’ve yet to see the C suite take a pay cut when workers do.

The US had such a large market share in steel mills right after WWII because they were far enough from wars that they didn’t get bombed. Where steel mills across Europe, Asia, UK, etc were targeted for bombing and sabotage to keep them from being used for building weapons.

👏👏👏👏👏 yes nix

Frank Lorenzo destroyed Eastern Airlines along with everything else that he destroyed that he touched.

Wasn’t even allowed to be involved with airlines period, at the end. Lorenzo was pure scum. Was literally BANNED from ever having any involvement with any airline

That and the booming economies of cheaper Goods of the countries we bomb to hell

BULL.
I grew up in AMerican Airlines and watched Frank Lorenzo DESTROY everything he touched.
He basically got eastern for a song and then gutted of their assets. It was then that the Union protested and both Lorenzo and Union fought until bankrupt. BUT, when Lorenzo bought them, they were actually in the black (not by much, but they had LOADS of assets that he wanted).
He did the same garbage that Lampert is doing to Sears.

Tesla is forward thinking with manufacturing practices, technologies, and engineering. The union would inhibit progress as they would not understand the complexities of a modern factory and the labor in such a workforce. Tesla is smart not to purchase the factory at this time. Let the factory sit, the terms may change where the union is not attached to the deal and the price of the factory goes down.

Free economy. The lower paying companies will end up with lower quality workers than their competitors who pay higher wages.

There are other things to consider than wages. Location … I know I wouldn’t want to move to Detroit to work. 😀

Detroit and Ohio are center to of the States highways and rail to all parts of the country

This does not mean that Tesla is not interested in the actual manufacturing plant. It just means that they’re not interested in taking over the UAW workforce. So Tesla can just wait until the plant closes and everyone is fired and then the Tesla can buy the plant re-open it and hire their own workforce. Which could be some of the same unemployed UAW workforce but no longer UAW.

UAW will not allow a non-union plant to operate in their home territory.

The juice isn’t worth the squeeze on this one.

It’s not thier plant if it’s sold to Tesla

Tesla would be smart to not get anywhere near these union idiots. that would be the death of the company.

No, Tesla can’t do that, because the same strong union protection in those States, which allowed the UAW to “organize” the GM factory, would lead to the same thing happening again if Tesla was running the factory.

It’s amazing that Tesla has thus far been able to resist the ongoing ceaseless efforts of the UAW to unionize its Fremont assembly plant. Tesla won’t again make the mistake of opening an auto assembly plant in a State with strong pro-union laws.

Since when does the “workforce” come with the plant? They aren’t owned slaves. Tesla would just want the factories, they could always rehire under their own agreement.

Even if GM is trying to force that, Tesla just has to wait them out until there’s a fire sale on the factory itself.

You never lived in the upper Midwest, I bet.

I see that in TV dramas and movies all the time. The bad guys want to conquer and divide and sell but the good guys try to keep the employees hired even with the switch of the ownership.

You are talking about the bad guys liquidating the business by selling off all its assets. The good guys revive the business. If Musk buys a plant it will be to make cars, not liquidate. Freemont employees get paid union wages and have better work conditions and benefits, the workers there would not gain anything by joining the UAW, and only loose union fees. They are not oppressed slaves.

And yet, the UAW is using every dirty trick in the book, from union agitators working at the Fremont plant to heavily biased anti-Tesla union agitprop stories run in local/regional pro-union papers, to flagrantly exaggerated stories from disgruntled workers posted to social media, to force Tesla’s Fremont plant to become another chapter in UAW.

Back in the day — in 1914 — Henry Ford was able to kill an effort to organize Ford’s main assembly plant by raising workers’ pay to an at the time unheard-of $5 a day. But the Ford Rouge Plant did finally become unionized under the UAW, the the last major U.S. auto maker to have its work force unionized, in 1941.

Will Tesla be able to hold off the UAW for 25+ years? I doubt it. Union protection laws are much stronger now, especially in California.

Yes, but the simple solution is to allow them to unionize and them keep them on the good side.
The problem with UAW/etc is that they are controlled by Mafia.

Then Tesla has to wait longer while the competitors releasing the compelling EV cars. Tesla has two choices: 1) Act now and endure the UAW drama in order to gain market shares or 2) be dying in agony

There will be plenty more ICE car factories that become available as Tesla gains market share.

You’ve mistakenly confused a long-term trend for a one-time opportunity. A classic mistake of underestimating Tesla.

Indeed. And rather strange that you got several down-votes for that comment.

…or 3) build new auto assembly plants in so-called “right to work” States, where State laws do not offer strong support for unions “organizing” factories.

Or even 4) Build all its cars in China and ship them elsewhere for sales. I hope not… but that’s a much better business plan allowing a bloated parasite like the UAW to suck the life out of the business!

Right to work states have little to no protection to its workers why you think people are moving to the coast

Ring ring

Well, Tesla’s expansion will need production plants, in non unionista states. Elon , do you still hate white southerners?

Have you stopped beating your wife?

Just those that are in the KKK or neo-nazi groups.

As I feared. The EV manufacturers aren’t going to merge with GM, Ford or Chrysler, because they wouldn’t be competitive with all the labor and legacy costs. The big 3 will eventually go bankrupt as the new EV manufacturers are able to make cheaper vehicles, grabbing market share.

I think using the words “no longer interested” in your headline was a mistake. The kind of thing Electrek does.

I never read anything to indicate Tesla “was interested in” taking over one or more factories.

Elon told the governor they would consider it in the new year.

I personally took that to mean “in a pig’s eye,” but Elon is well-known to prefer a more science-based approach.

And then using Mary Barra’s account of the facts? Weak. She is CEO of a company that is in a lot of trouble with Trump and is trying to control damage. She is probably making public statements as part of negotiating her way out of a mess.

She just ran out of shade to throw, resorted to mud. I wonder how many of those union workers will adapt to non-union work. Right now, they had better be considering options.

The Barra pf bad news strikes again!

union kills more jobs.

… and companies.

Study some economics and business.
Unions do not make the calls executives do.

No. Companies/Jobs are killed almost entirely by bad executives.
The fact that so many of you do not understand that, shows a real lack of economics and how the business world works.
It is EXECUTIVES that make the choices, not Unions.

Any talks would have been subject to a non-disclosure agreement.

Either:

1) Barra violated the non-disclosure
or
2) This was never actually anything that was said by Tesla during talks.

They did because Tesla said that it had “no comment.” in electrek.
In addition, Governor Kasich was pushing for Tesla to buy it.

“no comment” is exactly what Tesla would say with a non-disclosure agreement in place.

This is true whether Barra was in breech (and Tesla had recourse under the agreement) or not.

Are you under some false impression that Tesla wouldn’t demand on a non-disclosure agreement before entering any talks? Because Tesla’s wide-spread use of non-disclose is well known. Or do you just not understand what the term “non-disclosure” means?

Smart move Tesla, your future is manufacturing in countries more friendly to manufacturing and the US under this administration has become down right hostile to US manufacturers.
Your markets are in China, Asia, Europe and eventually India, the US is a liability and simply not a necessary risk.

Well, not until the UAW contracts die off, then Tesla can come in and employ laid-off workers happy to have a job at a great company.

Tesla (aka. Musk) lays off workers as needed to meet business needs. The union has a different goal.

It certainly doesn’t surprise me. I commented on the first IEVs news article on this subject that Tesla wouldn’t be interested in buying any more auto assembly plants in States with strong pro-union laws, such as California has. Not that I’m at all anti-union, but the way UAW has been using an ongoing smear campaign of union agitprop and outright lies in an attempt to force Tesla’s Fremont plant to unionize, has surely left Tesla execs highly allergic to any dealings with the UAW.

The UAW is a poster child for why many people are strongly opposed to big unions. Small unions are usually a very positive thing for wage-earners, but when unions get as big as UAW, their upper management can lose interest in the very workers they’re supposed to be supporting.

He never plan on going over and buying those plants. He can make a deal to the state to buy the plant from them in the process of eminent domain. Workers wouldn’t mind working from them without a union unless you treat them as human beings

Tesla is VERY interested in the Factory.
It is the UAW and GM’s problems that they do not want.