Corp. confirms plans to slash second-quarter production by idling 13 assembly operations in North America for various weeks beginning May 4.
The auto maker will remove 190,000 units from its build schedule, with most of the reduction occurring in the May-June period. Some plants will see additional downtime in July, when GM changes tooling for the new model year.
The auto maker cites high dealer inventories due to the depressed market and says the shutdown will allow it the opportunity to bring those vehicle stocks in line with demand.
The shutdowns also will enable it to “consider the possible production implications” of a failure to resolve a 4-year-old bankruptcy atCorp., the auto maker’s former in-house parts maker and its largest supplier. GM says Delphi’s lenders have resisted the auto maker’s proposal for the supplier to emerge from Chapter 11.
“Without the successful resolution of this dispute, it is’ view that or its lenders could force GM into an uncontrolled shutdown, with severe negative consequences for the U.S. automotive industry,” the auto maker says in a statement announcing the production cuts.
Nevertheless, GM North America President Troy Clarke says in a statement new-vehicle sales have been performing to expectations. “We’re taking aggressive steps to accelerate our inventory initiatives that have worked well since the first of the year.”
“While sales have been performing at or close to our plan estimates, and dealer inventories have been reduced accordingly, we want to more closely align inventories with even more conservative market assumptions,” he says.
Prior to receiving an initial taxpayer loan of $13.4 billion to stay afloat late last year, GM predicted U.S. industry sales in 2009 of 12 million units and nearly 64 million units worldwide. In January, the auto maker dialed back that estimate to 10.5 million units, while its global outlook was reduced to 57.5 million units.
Clarke says in a conference call with journalists this afternoon those assumptions have not changed, and today’s actions hasten an inventory drawdown originally planned to occur over the entire calendar year.
“We decided to pull that up,” he says. “Instead of spending the whole year getting the inventory in line, we really needed to get it in line much quicker. We were spot on with our sales forecast, and actually we were on our forecast to draw inventory down. We just wanted to take advantage of this opportunity to do it quick and better.”
Clarke also says the production cuts do not reflect preparation on the auto maker’s part for a bankruptcy.
The GM plant adjustments include:
- Arlington (fullsize SUVs), add down weeks 5/11, 5/18, 5/25, 6/01, 6/08, 6/15, 6/22, 7/6.
- Bowling Green (Cadillac XLR, Chevy Corvette), add down week of 7/13.
- Spring Hill (Chevy Traverse), add down weeks 6/8, 6/15, 6/22.
- Wilmington (Pontiac Solstice, Saturn Sky, Opel GT), add down weeks 6/15, 6/22.
- Wentzville (GMC Savana, Chevy Express), add down weeks 6/8, 6/15, 6/22.
- Silao, Mexico, (Chevy Silverado, GMC Sierra, LD Crew, Avalanche, Cadillac EXT, add down weeks 5/18, 5/25, 6/01, 6/08, 6/15, 6/22, 7/6.
- Detroit/ Hamtramck (Buick Lucerne, Cadillac DTS), add down weeks 6/01, 6/08, 6/15, 6/22.
- Farifax (Saturn Aura, Chevy Malibu), add production week of 7/6 (2nd week of shutdown).
- Flint Assembly (Chevy Silverado, GMC Sierra, HD Reg and Crew), add down weeks 5/11, 5/18, 5/25, 6/01, 6/15, 6/22, 7/6.
- Ft. Wayne (Chevy Silverado, GMC Sierra, LD Reg and Ext), retime down week from 4/27 to 5/4. Add down weeks 5/11, 5/18, 5/25, 6/01, 6/08, 6/15, 6/22, 7/6, 7/13.
- Lansing Grand River (Cadillac STS, CTS), add down weeks 5/4, 5/11, 6/01, 6/22.
- Lordstown (Chevy Cobalt, Pontiac G5), add down weeks 6/01, 6/08, 6/15.
- Pontiac Assembly (Chevy Silverado, GMC Sierra, HD Ext.), add down weeks 6/01, 6/08, 6/15, 6/22, 7/6, 7/13.
- Shreveport (Chevy Colorado, GMC Canyon, H3, H3T), add down weeks 6/15, 6/22, 6/13.