# CBC: GM could pull a lot of auto production out of Ontario by 2019?



## carverman (Nov 8, 2010)

GM's commitment to continue production as part of their multibillion bailout will expire in 2016.
If this happens it will be another blow to Ontario's fiscal forecast in 2019. 
This is only 4 years away or sooner. 




> On Wednesday, Joe McCabe, president of AutoForecast Solutions, sounded a fresh warning on General Motors, saying he expects the auto giant to pull out of Oshawa and reduce its Ingersoll, Ont., plant to a single shift, perhaps by 2019.


http://www.cbc.ca/news/business/gm-could-pull-back-from-ontario-auto-analyst-says-1.2859289


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## HaroldCrump (Jun 10, 2009)

Let's give them another bailout...


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## Nemo2 (Mar 1, 2012)

These things are not just happening in Canada:

http://online.wsj.com/articles/toyota-to-cut-2-600-jobs-in-australia-1417589795



> Toyota to Cut 2,600 Jobs in Australia
> Layoffs Are Part of Japanese Auto Maker’s Plans to End Production in Australia


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## HaroldCrump (Jun 10, 2009)

Nemo2 said:


> These things are not just happening in Canada:


Yup, basically anywhere with high-cost, unionized labor forces, lots of socialist-style govt. spending, debt & deficit (Australia is only marginally better than Canada, if at all).
Auto manufacturing is increasingly becoming commoditized and automated.
Easy to manufacture in low cost, low tax jurisdictions like Mexico, India, etc.

What all this is telling the high-cost, socialist welfare governments is that the goose has flown the roost...


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## sags (May 15, 2010)

A blogger "sounds a warning"..........."he expects GM to leave Canada and go to Mexico".............not likely.

Sounds more like he is trying to assume the role as the "go to auto guy" for a sensational headline.

GM is investing $250 million into the CAMI plant in Ingersoll. They are going full tilt 3 shifts, manufacturing the best selling Equinox and GMC Terrain.

Oshawa is a "flex plant"............the Camaro is a niche product and the product lineup will probably change to a more popular vehicle.

Manufacturing in Mexico is cheaper...............but their quality control is well below standard

A problem ALL of the auto manufacturers have discovered is........outsourcing work to cheaper labor countries saves dollars initially........but costs a fortune in recalls and public relations.

See...........outsourced airbags that explode............as a current example.

In the past manufacturers went to Mexico for brake parts.........rotors, pads, calipers. When brake parts started falling off vehicles.........they had a big problem.

It is the same with everything...........you get what you pay for.


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## carverman (Nov 8, 2010)

sags said:


> GM is investing $250 million into the CAMI plant in Ingersoll. They are going full tilt 3 shifts, manufacturing the best selling Equinox and GMC Terrain.
> 
> *Oshawa is a "flex plant*"............the Camaro is a niche product and the product lineup will probably change to a more popular vehicle.
> 
> ...


So in your opinion, the older Oshawa plant will still be used, even though it will need a huge investment to modernize it
for another GM vehicle line? 

What about the huge and expensive recall of the ignition switch that went into some of their production and GM
did nothing about it as reports of from owners of ignition accidently turning off and a few crashes that were traced
to the switch being in the accessory position and the air bags not deploying during the crash? 

Can't comment on brake parts made in Mexico "falling off vehicles"...as there needs to be some more evidence that
was the case, or maybe the brake parts (rotors/pads etc) just being made from inferior materials and not lasting as long.

Quality control of automotive parts from suppliers spans all countries, not just Canada, US and Mexico.

If GM feels that consolidating their automotive lines is to their financial long term benefit,
and high tail it across the border to the US,
(just like other US based companies have done in the last 2-3 years), what is going to prevent them from doing it?

Perhaps another Ontario taxpayer bailout to persuade them to stay and keep their non-profitable assembly lines going in Oshawa... then to ship most of that production to the US? Time will tell.


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## Guban (Jul 5, 2011)

Nemo2 said:


> These things are not just happening in Canada:
> 
> http://online.wsj.com/articles/toyota-to-cut-2-600-jobs-in-australia-1417589795


Couldn't get the full story as I don't subscribe to the Wall Street Journal, but the GM situation is a slap in the taxpayer's face due to the bailouts provided. Did Australia provide bailouts/loans/subsidies to Toyota? I don't know. If Australia did not, then the two situations are not that similar to my mind.


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## Guban (Jul 5, 2011)

carverman said:


> Perhaps another Ontario taxpayer bailout to persuade them to stay and keep their non-profitable assembly lines going in Oshawa... then to ship most of that production to the US? Time will tell.


Multinational companies use subsidies, tax bargains, and other side deals all of the time. It is not just the auto companies. GM and Chrysler just got lots of headlines by the size of the sweet deals they got, but it sounds like all countries are doing this. It is a race to the bottom line, with all countries trying to attract these corporations for jobs for their citizens. It is hard to blame the countries since not doing this definitely will cause these corporations to leave. The companies win by reducing costs and increasing profits, while the taxpayers around the world loses. I suspect the environment also suffers as countries are willing to relax environmental laws if it brings in tax revenue from companies and/or individual taxpayers.


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## Nemo2 (Mar 1, 2012)

Guban said:


> If Australia did not, then the two situations are not that similar to my mind.


'Similar' inasmuch as automakers appear to be looking elsewhere...other than where highly unionized/paid employees dominate?


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## fraser (May 15, 2010)

I think that I read this week that 70 percent of Toyota vehicles sold in Canada are actually made in Canada but GM less than 10 percent of vehicles sold in GM dealerships are actually made in Canada. Could this be correct? What is missing from that data?


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## sags (May 15, 2010)

Carverman...........

GM has modernized the Oshawa plant so many times, I have lost count on what is currently there.

One is a "flex plant", which from my understanding means it was modernized so the assembly lines can be easily reorganized to produce another vehicle.

I remember a few years ago, when the Suzuki/GM partnership dissolved and GM wanted to build a new vehicle in the CAMI plant. They discovered there wasn't enough space......as the plant was built specifically to build the small Suzuki Tracker vehicle. GM did spend money adding on to the plant and now build the Equinox and Terrain there. That is why they build "flex plants" now.

GM used to have vertical integration with most of their parts.........by owning Delco and other suppliers. When they sold those businesses, they lost control over the quality aspect of the vehicles.

They also sold their financing arm..........GMAC, ..........later renamed Ally.........which was another mistake, as they lost control over financing of their cars.

Terrible car design (Aztec, Impala) and selling off GMAC and Delco hurt GM as much as the sudden rise in gas prices and the loss of large vehicle sales.

The cost of labor was never a problem for GM or the other automakers..........when they were selling cars and operating a smart business.

They set many years of record profits with a unionized work force.

GM is now in the news.........for parts supplied by a third party. They take the public relations hit for shoddy work by someone else.

Unless GM representatives are standing in the multitude of parts supplier plants watching the assembly process................they have no control over the quality of parts going into a vehicle.

Could GM close down and go to Mexico ?..............Of course they could, but is that a good long term plan ?

What happens if there is a change of government in Mexico..........workers strikes.............poor workmanship..............

It is expensive to build new assembly plants and move them around. They don't want to be doing that too many times.

They might go..........I don't know.

But I doubt a blogger has any insider information that they are planning to leave.

There is a commitment by GM to build in Canada until a specified date, but that is nothing new.

Every contract that GM signed with the CAW had the same kinds of time and work commitment . 

For the most part, they were simply revised with a new contract.


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## sags (May 15, 2010)

fraser said:


> I think that I read this week that 70 percent of Toyota vehicles sold in Canada are actually made in Canada but GM less than 10 percent of vehicles sold in GM dealerships are actually made in Canada. Could this be correct? What is missing from that data?


The Woodstock Toyota plant was built to manufacture the RAV4. Last I heard they were only operating at 1 shift..........but that could have changed by now.

The Cambridge plant produces Toyota best sellers...............so they likely are selling a lot of Canadian made product in Canada.

I would think the bulk of GM's Canadian sales are manufactured in the US..........but not sure on the numbers, given all the different models available.

We were deciding between an Equinox/Terrain built in Ingersoll, Ontario and a Chevrolet Cruze built in the US.

We chose the Cruze............simply because we didn't need the size of the Canadian made products.

The success of individual auto assembly plants depends so much on the product they are given to manufacture. Each plant bids on the work and each plant manager lobbies for work to be placed at their assembly plant. There are a lot of meetings, arguments, and discussions on how and where to allocate production.

There is a lot that goes into the considerations.........labor costs, currency values, government support, quality issues, age of plant, proximately to markets etc.

If GM decides to move production out of Canada.......it will due to a lot of factors, including but not limited to the cost of labor.

If they do decide to leave............it will not only be an economic blow to the workers in the plants, but also the tens of thousands of others who work in supplier plants, and in local businesses. It also will have a negative effect on those working for other manufacturers such as Toyota and Honda..........who will use the "threat" of moving to ratchet down wages and benefits for their own workers.

Local municipalities would lose tax revenues, local utilities would lose income........and governments at all levels would lose tax revenues.

It isn't as simple as "we aren't bailing you out with subsidies anymore". 

The consequences are real and the stakes are high.


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## fraser (May 15, 2010)

The last two times we shopped for vehicles we did not even bother going into the Ford, GM, or Chrysler stores. Went to Toyota, Honda, and Acura stores and perhaps a Mazda store...cannot remember.


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## sags (May 15, 2010)

The Cruze is actually a really nice car..........almost a mid-size, so it is more roomy than other compacts.

I have had different experiences with GM cars though...........I had an Oldsmobile Alero..............the car from Hades...........what a mess they were.

A recycling truck backed into my Cruze..........so we are currently driving a Mazda 3 rental.

I like the looks of it.......but it feels small compared to the Cruze.

It is also a "plain Jane" rental..............and I miss my satellite radio.....................:biggrin:


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## carverman (Nov 8, 2010)

sags said:


> The Cruze is actually a really nice car..........almost a mid-size, so it is more roomy than other compacts.
> 
> I have had different experiences with GM cars though...........I had an Oldsmobile Alero..............the car from Hades...........what a mess they were.
> 
> ...


The Cruze was one of the models with the defective ignitions switch. I can just imagine going down the highway at 100kph,
hiitting a bump and having the engine switched off...terrifying when you think you would lose power steering instantly
and what steering was available would need brute strength to overcome the power steering rack,and only one
application of the brakes in the vacumn reservoir available.
That really gave them a bad reputation, as they knew about the defective switches for a few years and hid the fact,
with only secret recalls through the dealers. 

http://www.businessweek.com/article...-government-bailout-protect-it-from-liability

I used to own GM cars in the 70s/80s..mainly those big full size cars (Chev Caprice/Pontiac Pariesienne) ...not bad cars, even
if they were gas guzzlin V8s. Easier to fix..no computerized this and that, like today..The most complicated electronics besides the stereo, was the power windows and seats. 

However GM produced a lot of junk over the years...the Chevette, Citation, the "Viagara" (Vega) which had numerous engineering problems..just junk basically.


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## carverman (Nov 8, 2010)

sags said:


> If GM decides to move production out of Canada.......it will due to a lot of factors, including but not limited to the cost of labor.
> 
> If they do decide to leave............it will not only be an economic blow to the workers in the plants, but also the tens of thousands of others who work in supplier plants, and in local businesses. It also will have a negative effect on those working for other manufacturers such as Toyota and Honda..........who will use the "threat" of moving to ratchet down wages and benefits for their own workers.
> 
> ...


So more than likely GM will be looking for another bailout from the taxpayers of Ontario/Canada, threatening to pull out, if they don't.
Given that choice, Wynne and the unions will be pushing for one to keep them there, because the areas (like Oshawa) would be devastated if they did pull out.


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## m3s (Apr 3, 2010)

My friend imported a Cadillac CTS this year and had to get that ignition fixed before doing so.

To see what all the fuss was about he kneed his keys on an empty highway. Sure enough.. engine died, no brakes, no steering, and no ignition until you shift into N


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## carverman (Nov 8, 2010)

m3s said:


> My friend imported a Cadillac CTS this year and had to get that ignition fixed before doing so.
> 
> To see what all the fuss was about he kneed his keys on an empty highway. Sure enough.. engine died, no brakes, no steering, and *no ignition until you shift into N*


At least he was able to replicate the problem in safer conditions, but that would come as a shock to most drivers, because you are not expecting the engine to just die like that. I would think that at speed in gear the engine compression would eventually slow the vehicle down, but the steering would be as difficult as driving a MAC truck and the brake application similar. 
The power brake reservoir might give you just one application of the brakes but that's it after that..you would
have to practically stand on the brake pedal to get the vehicle to stop.

My understanding was that it was a design issue with the lock tumblers being slightly too short so that when
the key(s) were in and in RUN position , any bouncing of the key(s) (most drivers have more than one key attached
to the key ring) would inadvertently cause the key switch to move from RUN to ACCessory and that would
kill the ignition.

This problem was acerbated by the fact that GM denied that the problem existed until they were getting
sued from all the deaths resulting from accidents where the drivers ran off the road and crashed..and the
investigation determined that the air bags were not deployed at time of crash.
That would certainly put any prospective buyer off GM products.

Wasn't aware that moving the gear shift in the CTS from D to N would get the ignition back though..are
you sure about that? 

BTW, I may have mentioned the wrong GM model that had the bulk of the ignition failures..it was the Chev Cobalt, and maybe not the Chev Cruze?


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## hystat (Jun 18, 2010)

We've made these automakers teet-sucking leeches. They need a raise, or want more dough, they start crying closure. Screw 'em. 
Hey, what happened to this?:
http://m.theglobeandmail.com/report...F+Media&utm_campaign=Shared+Web+Article+Links


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## Rusty O'Toole (Feb 1, 2012)

Some years back certain Cadillacs were notorious for bursting into flames in the garage or driveway due to their Mexican wiring harnesses. Just one of the many faults of design and construction in Cadillacs, and GM vehicles.

There was a time they had a stranglehold on the auto business and were the biggest richest company in the world. Now I can't imagine what a loyal GM customer looks like. I knew some solid GM fans years ago but they all must have died of old age or got alzheimer's by now. GM has been skeeving out on quality for over 40 years.


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## My Own Advisor (Sep 24, 2012)

Rusty O'Toole said:


> Now I can't imagine what a loyal GM customer looks like.


I don't know if I know anyone that drives a GM....


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## rford (Aug 16, 2014)

I wrote off buying from north american car manufacturers after the bailout, except for Ford. This year though I wrote them off after holding ontario ransom for investment then deciding to move to Mexico when they didn't get what they wanted. Totally fine with foreign manufacturers that make their vehicles in Canada though. RAV4/Civic/CRV etc.


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## sags (May 15, 2010)

Actually............Toyota and Honda have been competing for the record of world leader in vehicle recalls.

Toyota had the largest recall in the history of auto manufacturing......with their stuck accelerator problems,......... that forced the termination of the CEO.

Stuck accelerators, fuel leaks, suspension problems........and lately 2 million vehicles recalled for defective brakes.

Foreign cars having better quality is a myth anymore............unless they are high end vehicles........usually German or Swiss.


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## Daniel A. (Mar 20, 2011)

My Own Advisor said:


> I don't know if I know anyone that drives a GM....



I have two of them .


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## Jorob199r (Sep 4, 2014)

I bought a GM as my first car 4 and 1/2 years ago. Never again. Lemon. No wonder they're going bust.


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## Rusty O'Toole (Feb 1, 2012)

GM had to drive me away and force me to stop buying their cars. With reluctance I stopped buying their cars in the early 80s. Since then I bought Chrysler products and was happy with their reliability and longevity if not with their style and ride. But every Dodge minivan I buy seems to get less and less comfortable, even when they look identical to the old model the seats and the ride get worse. I don't think I will buy another one. I would like to support Canadian jobs and Canadian industry but they should meet me half way.


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## My Own Advisor (Sep 24, 2012)

@Daniel A. - Now I know!


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## hystat (Jun 18, 2010)

Jorob199r said:


> I bought a GM as my first car 4 and 1/2 years ago. Never again. Lemon. No wonder they're going bust.


lemon, or fairly obvious issue with dealer not acknowledging the problem or capable of diagnosing/fixing it?

because the latter is any brand. That same tech that couldn't fix a GM probably now works on Toyotas or Hyundais and can't fix those either.


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## carverman (Nov 8, 2010)

hystat said:


> We've made these automakers.... corporate bums looking for handouts....
> They need a raise, or want more dough, they start crying closure.





> Senior executives from the Detroit Three have complained consistently for the past several years that Canada is the most expensive place in the world to build vehicles


I'm sure they get together in their ivory palaces and discuss ways of improving their profit lines to ensure they get their multi million dollar bonus

but Michigan is giving them large tax concessions to stay and expand there.



> *About $6.4 billion of Michigan’s tax expenditure spending went to just three companies* — General Motors Co., Ford Motor Co. and Chrysler Group LLC, according to the Good Jobs First report.
> The tax expenditures were largely for investment projects and were designed to keep the automakers from leaving the state. *They are still collecting benefits from those tax breaks.*
> 
> But the companies have collectively shed hundreds of thousands of jobs over the past three decades.
> ...





> The outcome and how flexible the union is in response to the automakers' demands will influence whether the automakers invest billions in plants in Canada, the U.S. or Mexico.


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## Rusty O'Toole (Feb 1, 2012)

"I don't believe they really care where their cars are made as long as their profits keep rolling in."

Do you think they have a choice? Can any company stay in business losing money year after year? The auto business has always been up and down, with years of lush profits and years of losses. Studebaker was a great company to work for, they never had a strike and they gave the UAW everything they asked for, right up until they went broke.


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## sags (May 15, 2010)

GM has been doing pretty well since the reorganization, I think.

They have had 4 years of solid profits and paid their US hourly workers a $7500 US profit sharing cheque in February 2014.

I expect they will receive a similar bonus in February 2015.

Canadian hourly workers got concessions and no profit sharing bonus.

http://www.abc12.com/story/24657396/gm-hourly-workers-to-receive-7500-profit-sharing-checks


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## fraser (May 15, 2010)

While working, we always had two vehicles. One was a company car, GM, then Ford, replaced every year plus a day. 

The second was our own which was a Toyota, now a Honda.

Apart from the significant quality issues that we found on a number of new car deliveries, we found a huge difference in the quality/thouroughness of the dealer service. And we certainly had lots of it with our Ford products. It is that quality and that service difference experience that led us to ignore those brands when we were shopping for a personal replacement vehicle.


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## carverman (Nov 8, 2010)

sags said:


> GM has been doing pretty well since the reorganization, I think.
> They have had 4 years of solid profits and paid their US hourly workers a $7500 US profit sharing cheque in February 2014.





> Sags; not all GM employees got those *UPTO $7500 bonuses*...only about 48,000 ELIGIBLE US EMPLOYEES... A little over $33 million, that's a drop in the bucket compared to the profits GM made.
> How much did the CEOs make? That is not published for obvious reasons.
> 
> 
> ...


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## sags (May 15, 2010)

Canadian workers and retirees reopened their contract several times to give more concessions.

They agreed to give up weeks of vacation, Christmas bonuses, two tier wages for new hires, cost of living freezes, capped retirement years of service.

Maybe GM will decide to move......possibly because they don't expect they can squeeze anymore out of Canadian workers.

I expect if GM does vacate Canada...........those working at Toyota and Honda can expect a cut in pay and benefits.

The downward spiral continues.................not for GM..........but for Canadian workers.


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## sags (May 15, 2010)

GM had way too many dealerships..........that were poorly run, poorly maintained leftovers from the days of giving dealerships as personal favors.

GM had lots of negative feedback from those dealerships,........poor service, unhappy customers,.........but couldn't force changes at them.

So they eliminated them and gave dealerships to only the best local dealers. The one I deal with is outstanding for service and quality.

But, you are right..........the same guy sells GM, Ford, Chrysler, and Hyundai vehicles at different locations. He has his bases covered.


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## carverman (Nov 8, 2010)

sags said:


> G
> 
> So they eliminated them and gave dealerships to only the best local dealers. The one I deal with is outstanding for service and quality.
> 
> But, you are right..........the same guy sells GM, Ford, Chrysler, and Hyundai vehicles at different locations. He has his bases covered.


Not sure that was all of it..two of the dealers that got cut out, had a Pontiac/Buick/Olds? line as the major lines. 
When the Pontiac line was dropped and then the Oldsmobile line was dropped, that left only the Chev/Cadillac 
and truck dealers. I think initially GM was thinking of dropping the Buick line, but then they resurrected as
a midsize crossover, so it's still around..at least for now. 

One of the oldest dealers here in Ottawa, was a Chev/Olds/Cadillac dealer...they are still around selling Chev Cadillac and also Hyundai now. 
I think they were smart to diversify after the 2009 GM near bankruptcy that resulted in the bailout.


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## fraser (May 15, 2010)

We would/will never consider a GM product. 

Three reasons really. First is the quality of their product(s). Second is the reputation/actions of the Company over the years as it pertains to product safety and quality. Third is the dealer service experience.

Lots of other good products out there...why on earth by from a manufacturer like that.


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## sags (May 15, 2010)

carverman said:


> Not sure that was all of it..two of the dealers that got cut out, had a Pontiac/Buick/Olds? line as the major lines.
> When the Pontiac line was dropped and then the Oldsmobile line was dropped, that left only the Chev/Cadillac
> and truck dealers. I think initially GM was thinking of dropping the Buick line, but then they resurrected as
> a midsize crossover, so it's still around..at least for now.
> ...


Kind of funny really,......... people leave GM because of dealership problems...........and buy a Hyundai at the same dealership.

Also kind of strange.............the fastest selling vehicle in the US the last couple of months..............the Ford Mustang.

I wouldn't have guessed that...........I guess people want more vroom....vroom.

*November's Fastest-Selling Cars

*2015 Ford Mustang coupe: 10 days
2015 Porsche Macan: 10 days
2015 Subaru WRX: 10 days
2015 Honda CR-V: 11 days
2015 Mercedes-Benz E350 sedan: 11 days
2015 Subaru Outback: 11 days
2015 Toyota Camry Hybrid: 11 days
2015 Toyota Highlander: 13 days
2015 Cadillac Escalade: 14 days
2015 Audi Q5: 15 days
2015 Lexus GX 460: 15 days
2015 Toyota 4Runner: 15 days
2015 BMW X5: 16 days
2015 Chevrolet Colorado crew cab: 16 days
2015 Hyundai Santa Fe Sport: 16 days
2015 Kia Sedona: 16 days
2015 Honda Civic coupe: 17 days
2015 Subaru Legacy: 17 days
2015 Toyota Camry: 17 days
2015 Toyota Tacoma extended cab: 17 days


http://blogs.cars.com/kickingtires/2014/12/novembers-fastest-and-slowest-selling-cars.html


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