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General Motors is preparing to pause the production of BrightDrop delivery vans at its all-electric CAMI Assembly plant in Ontario, according to Unifor, the largest private sector union in Canada that represents approximately 320,000 workers.
Starting April 14, GM will begin implementing temporary layoffs, with the manufacturing halt scheduled to last for three weeks, as stated by Mike Van Boekel, the plant chair for Unifor Local 88, representing CAMI’s hourly workers, in an interview with the Detroit Free Press.
Workers will briefly return for two weeks of limited operations in May before the plant shuts down again for 20 weeks. The downtime will allow GM to undertake retooling efforts in preparation for the 2026 model year of its commercial electric vehicles.
Previously, the CAMI plant operated two shifts focused on producing Chevrolet BrightDrop vehicles. Upon resumption of operations in October, Unifor indicated that the plant would be reduced to a single shift, potentially affecting around 450 jobs.
“This is devastating for our members,” said Van Boekel, expressing the critical impact of the layoffs. “We are losing these shifts indefinitely.”
Around 1,200 members of Local 88 are involved in assembling BrightDrop EVs and in the construction of battery modules and packs.
“This represents a significant setback for many families in Ingersoll and the nearby areas who rely on the plant for their livelihoods,” remarked Unifor National President Lana Payne in a statement. “It is imperative that GM maximizes its efforts to prevent job losses amidst this downturn, and that all levels of government step in to assist Canadian auto workers and promote Canadian-made products.”
GM Canada confirmed that CAMI is undergoing operational adjustments and workforce changes to better align inventory with current market demand.
In case you missed it: GM is storing slow-moving electric vans manufactured in Canada at a facility in Michigan.
“GM is dedicated to the future of BrightDrop and the CAMI facility and will support employees through this transition,” stated the company in an email to the Free Press. “This adjustment is a direct response to market demand and is intended to rebalance our inventory. Production of BrightDrop and EV battery assembly will continue at CAMI.”
This announcement follows GM’s struggle with the inventory of BrightDrop, which has unfolded less than a year after the company integrated these commercial vans into its Chevrolet brand to improve performance.
The challenges GM faces in the electric van market intensify as competition increases from companies such as Ford and Rivian, with high pricing also a hurdle for potential customers. Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, noted that the inconsistent trade environment, impacted by former President Donald Trump’s fluctuating tariff announcements, has made it difficult for the company to project U.S. sales accurately.
“With the possibility of tariffs on Canadian products, it’s challenging to build vehicles there for the American market,” Fiorani remarked.
Current tariffs with Canada are set at 25%, although the auto industry is still seeking clarification regarding the inclusion of vehicles and parts that comply with the U.S.-Mexico-Canada Agreement.
At CAMI Assembly, GM manufactures the BrightDrop 400 and 600 electric vans, utilizing one of their most significant investments in Canada tailored for all-electric vehicle production, which also included government funding support. Recently, a large inventory of these electric vans has accumulated at storage sites on both sides of the U.S.-Canada border.
Last year, CAMI produced 3,500 BrightDrop electric delivery vans, a stark decline compared to nearly 200,000 Chevrolet Equinox vehicles manufactured five years prior, as reported by the Automotive News Data & Research Center. Of those produced, only 1,529 vans were sold compared to Ford’s 12,610 E-Transit and Rivian’s 13,243 EDV models.
For the current year, GM has sold only 274 Chevrolet BrightDrop vehicles thus far, a slight increase from 256 in the first quarter of 2024.
Visual evidence of this issue was captured last month, showing numerous vehicles in a storage lot in Flint, Michigan, with similar images reported from CAMI in Ingersoll, Ontario.
CAMI had recently resumed operations in late 2022 after a retooling phase for electric vehicle manufacturing. However, due to the need to adjust production schedules and manage inventory, a planned two-week shutdown was announced for early 2025.
The lagging sales of BrightDrop in the U.S. can be attributed to its relatively high price when compared to competitors. The BrightDrop vans have a starting price of around $74,000, while Ford’s E-Transit with extended battery range starts at $51,600, offering a much more cost-effective choice.
In 2021, GM launched BrightDrop as a subsidiary, anticipating over $10 billion in revenues by 2030 with profit margins in the low 20% range.
BrightDrop’s CEO, Travis Katz, had previously projected production of 50,000 trucks annually starting in 2025 and expected substantial revenue generation. However, Katz departed the company in late 2023 without providing reasons, as GM commenced restructuring BrightDrop for cost efficiency.
Payne concluded, stating, “The world is rapidly transitioning towards electrification. If we delay our response in Canada and the U.S., we risk losing ground in the industry.”
Fiorani pointed to the complicated economics and insufficient charging infrastructure as significant barriers that hinder BrightDrop’s market entry in the U.S. “On paper, the concept is compelling. But traditional business operators may hesitate to invest in something they don’t entirely understand,” he noted. “In early 2020, during the boom in direct home deliveries, this was an ideal vehicle for that market.”
Source
finance.yahoo.com