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GM boosts production as clunkers drains inventories

GM boosts production as clunkers drains inventories

Jamie LaReau
Automotive News | August 18, 2009 – 2:11 pm EST


DETROIT — General Motors Co. will increase North American production by 60,000 vehicles from earlier schedules through the rest of the year as it rebuilds inventories drained by the cash-for-clunkers program.

GM’s planned third-quarter output will be 535,000 units, a 35 percent increase over second-quarter totals. Fourth-quarter production will be at least 20 percent more than the third, said Mark LaNeve, vice president of U.S. sales, during a conference call today.

“And it’ll probably go up from there,” he said. “Our dealers are clamoring for more vehicles in every segment.”

GM has about 360,000 units in U.S. inventory, compared with about 1.3 million units at this time of year just “a few years ago,” LaNeve said.

The reduction stems from industry sales running at 27-year lows and a shutdown of most North American production during GM’s 39-day bankruptcy. The clunkers program, which began in earnest in late July, contributed to the industry’s strongest sales performance of the year last month.

“We want to run lean, but we’re way too lean right now and we’re going to miss sales unless we put some production in,” LaNeve said.

More shifts

GM is adding shifts to its CAMI plant in Ingersoll, Ontario, and its factory in Lordstown, Ohio. GM makes the Chevrolet Equinox and the GMC Terrain crossovers at CAMI and the Chevrolet Cobalt compact car in Lordstown.

The move will bring 1,350 employees back to work, GM said in a statement. It will also allow 10,000 workers across GM’s North American plant network the opportunity for overtime, LaNeve said.

GM has put its plant in Arlington, Texas, on overtime this month. GM builds the Cadillac Escalade, Chevrolet Tahoe and GMC Yukon trucks there. There will also be additional overtime in Fort Wayne, Ind., where GM assembles Chevrolet Silverado and GMC Sierra pickups.

“We look for pickups to continue to accelerate along with a recovery in the housing industry and overall economy,” LaNeve said.

GM will also keep its factory in Orion Township, Mich., running until the end of November rather than shutter it in mid-September as planned. GM makes the Chevrolet Malibu and Pontiac G6 there. The plant will be converted to make an unnamed small car in 2011.

GM also says there is increased demand for the Chevrolet HHR crossover and the Chevrolet Colorado and GMC Canyon small pickups.

Recently launched vehicles are selling well, he said. GM has just a 15-day to 20-day supply of the new Chevrolet Camaro sports coupe and about a 10-day supply of the Equinox. GM is also low on the Cadillac SRX crossover and CTS wagon and Buick LaCrosse sedans.

“We’re adding 60,000 units to our production schedule,” LaNeve said. “We’re probably not done, but this is what we’re ready to talk about today.”

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