GM Pauses Truck Production to ‘Optimize’ Inventory Levels
With a headline like that, one might think today’s date was closer to 2003, not 2023. Nevertheless, it seems The General has decided to idle its Indiana truck plant for a couple of weeks this spring in order to “help the company maintain optimal inventory levels.”
What’s next? Zero percent financing and cash on the hood?
According to The Detroit News which is citing an internal memo it viewed yesterday, there will be a shutdown lasting two weeks at the light-duty truck plant in Fort Wayne, Indiana. The action will kick off on the week of March 27, though GM's three other full-size truck plants – Mexico, Canada, and Flint – are said to not be affected by this decision. Spox for the company confirmed these plans when asked by The Detroit News.
What’s the impetus? It seems The General is keen to maintain the right product mix at dealer levels – who are the real customers, as long-time readers will know – rather than stuffing the channel with unpopular configurations through heavy-handed allocation. The Fort Wayne facility, which opened in 1986 and is home to over 4,000 employees, currently makes copies of the Chevrolet Silverado 1500 and GMC Sierra 1500.
Note that Flint and Canada primarily make HD pickups, while the Mexico facility focuses on Crew Cab 1500s. If body styles that are in less demand are being cranked out of Fort Wayne, and it seems they could be, then the manufacturing pause is explained. Why ship yaffles of Double Cabs when it’s easier to shift Crews and HDs?
Analysts at Cox Automotive estimate there is approximately a 100-day supply of GM trucks on the ground, comparable to the 83-day supply at Ram. Those ain’t small numbers, even for the so-called Before Times, it must be said. Anecdotally, the General Motors dealer in your author’s small town has a healthy inventory after weathering plenty of bare pavement during the pandemic’s leanest days.
Most talking heads expect this February to be a robust month for vehicle sales, though the twin headwinds of rising interest rates and affordability issues continue to loom in the windshield like ducks on the horizon. For the industry’s sake, we hope those ducks are friendly mallards and not killer geese.
[Image: GM]
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Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.
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GM thinks it can avoid the up to 25% off sticker when fullsize pickup production and inventory returns to pre China SNAFU.
GM can but they’ll also lose sales figures by 50%.
I don't foresee Stellantis doing this. They will keep producing at max capacity and throw huge discounts on the hood to capture market share. GM will quickly learn that they can't sell an equivalent product for $15,000 more than the competition.