GM plans to idle several plants for 10 weeks this year for retooling
General Motors plans to idle multiple North American plants for a total of 10 weeks later this year to retool for upcoming models, including redesigned pickups.
The scheduled downtime is one reason GM has allowed inventory to reach the highest level in nine years. GM had a 97-day supply of vehicles as of April 1, according to the Automotive News Data Center, up from 91 days a month earlier and 71 days on Jan. 1.
By comparison, FCA US had a 82-day supply as of April 1, while Ford Motor Co. an 80-day supply.
“Our inventory is high because we’re going to take 10 weeks out in the back end of the year as we’re modifying our plants, particularly with pickup trucks,” Alan Batey, GM’s president of North America, told reporters after GM unveiled a redesigned Buick Enclave.
With regard to inventory, “we are absolutely where I want us to be,” Batey said. He said GM expects to finish 2017 with about the same level of inventory as it started the year with and that GM could cut production further if the market falls short of expectations, though no specific plant actions are planned.
“If we need to balance supply and demand, we’ll do it,” he said.
GM eliminated production shifts at two car plants in Michigan and one in Ohio during the first quarter. That helped reduce car inventories to a 101-day supply as of April 1 from 123 days on March 1.
But supplies of the Chevrolet Silverado jumped last month to 115 days worth from 78.
Batey declined to say when GM planned to introduce a redesigned Silverado and GMC Sierra. Analysts and dealers have told Automotive News that they expect GM to begin selling its next-generation full-size pickups in the second half of 2018. The current generation of the Silverado and Sierra went on sale in 2013, and GM freshened them in 2015.
He said pickups account for “a big piece of” the plant retooling planned for later this year but that other models are involved as well.
“I’m not going into details,” Batey said, “but we have some exciting things coming out.”
GM officials also have cited the introduction of four redesigned crossovers as a major reason for the company’s inventory spike. Chevy dealers began selling the second-generation Equinox in March, and GM is preparing to launch new versions of the Chevy Traverse, GMC Terrain and Buick Enclave by fall. Batey’s comments about the scheduled downtime came after Buick revealed the redesigned Enclave at an event tied to the New York auto show.
In terms of volume, GM’s inventories have climbed 36 percent since Aug. 1, reaching 925,000 units on April 1. Executives have said they expect inventories to begin declining in the second quarter.
GM’s U.S. sales in the first quarter rose 0.9 percent to 689,521 vehicles in an overall market that fell 1.6 percent. GM’s light-truck sales grew 7.7 percent while car sales slipped 14 percent.
Source: Automotive News