Understanding the reasons for GM’s shift of work from Mexico to Canada

An article in the New York Times (September 20, 2016)  titled “G.M. Job Shift From Mexico Tests a Trump Premise”, describes a decision by General Motors to shift work from an automobile engine plant in Mexico to Canada and shutting down the Mexican plant. But the decision to move work to Canada was accompanied by an acceptance of a flexible benefits agreement by their unions, thus making it a profitable decision for GM. The article also claims that demands for US manufacturing of automobiles that are not profit maximizing for GM risk decreasing demand for US component suppliers to GM and thus making the US economy worse off overall.  Should US manufacturers who sell to US consumers be mandated to have a certain fraction of US manufacturing or is it better to let the market dictate their optimal supply chain configurations ? In the GM example, are there lessons learned for auto unions that might permit them to trade off benefit flexibility for domestic job size growth ?

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About aviyer2010

Professor
This entry was posted in Capacity, competitiveness, consumer, Global Contexts, Made in USA, manufacturer, Operations Management and tagged , , , . Bookmark the permalink.

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