By on March 13, 2009

GM intends on increasing vehicle production in the second financial quarter, from 380k to 550k. I know: it’s a major WTF moment. There is no evidence whatsoever that the U.S. new car market is headed for recovery. If anything, the opposite is true, what with home foreclosures and unemployment rising like steam from a New York City manhole. Not to mention the headline of The Detroit News story wherein this information resides: “GM Dealers Balk at Ordering New Vehicles.” The article reports that GM’s orphaned HUMMER, Saturn and Saab dealers aren’t ordering any more vehicles (duh), and current inventory levels at the other stores are, to use the old Bentley power output description, “adequate.” No wonder GM spokesman Chris Lee said “that [production] number could be adjusted.” Still, you’d kind of hope GM PR could do better than that, what with more than a decade of spinning bad news into gold (for the executives anyway). And so they do . . .

“Vehicles that are being requested by dealers or customers are the ones where production would be increased,” GM spokeswoman Susan Garontakos said. “If you’ve got a lot of Saturn vehicles, you can bet we’re not producing those vehicles. There is not a ramping up of production of vehicles that we’re not selling. It wouldn’t make sense.”

So what GM products are selling in sufficient quantities to justify a 45% production increase? Well, none really. Watching the DetN struggle to make the case for their hometown hero’s production plans is plenty painful.

Chevrolet Malibu retail sales were up 33 percent compared with a year earlier. At the end of February, GM had a 90-day supply of Malibus, down from 143 in January, but up from 39 days a year ago, according to Ward’s Automotive Reports. A two-month supply is considered a healthy inventory level, Bragman said.

One bright spot last month was GM’s crossovers. The Detroit automaker sold 6,400 of its new Chevrolet Traverse, a 23 percent increase from January, and Chevrolet’s sales of its crossovers—HHR, Equinox and Traverse—were up 7 percent from last year.

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21 Comments on “GM Set to Increase Q2 Production by 45%...”


  • avatar
    TVC15

    Well, ya gotta pay the workers either way. Might as well build some more flowerpots!

  • avatar

    INCREASE production? Wait for the story I’m working on …..

  • avatar
    KatiePuckrik

    What has “Home Depot” and GM’s RenCen got in common?

    They’re both full of tools!

    Thank you! I’ll be here all week!

  • avatar
    TexN

    “Stupid is as stupid does.” – Forrest Gump

  • avatar
    Deepsouth

    I can’t wait to see what new and inventive program GM comes with to force unwanted inventory on GM dealer lots.

  • avatar
    thalter

    GM books the revenue when the car is sold to the dealer, and not the end customer. Their new car market is their dealer body, which has little to do with the actual retail market.

    Bottom line: They’ve got to build more cars (and force them on their dealers, if need be) to book more revenue in order to meet their “viability requirements.”

    Who cares that the unwanted car and trucks will eventually have to be sold at a loss with a glovebox full of cash, further eroding resale values, lease residuals, and brand equity.

  • avatar
    mikey

    @ TVC1 “Well,ya gotta pay the workers either way”
    How does that work anyway?The job banks are gone.Does GM just give them a regular paycheck?
    Just wondering thats all.

  • avatar
    KixStart

    The only explanation I can imagine for Traverse sales reaching 6400 units would be “cannibalizing sales of the Tahoe.”

  • avatar
    RetardedSparks

    This, and the crap about passing on the $2b this month, are just PR stunts to show their “viability.”
    They’ll adjust production back down as soon as they get their bailout, and spin that as “acting responsibly.”

    Re the jobs bank, it’s still there, just re-named.

  • avatar
    mikey

    45% is not that out of line for Q2.Not when one considers that January production was next to nothing.The Camaro is ramping up daily,so that might impact Q2 numbers.

    So what do they call the job bank now RetardedSparks?

  • avatar
    Point Given

    Up here in Alberta, I’m having trouble finding some trucks, some SUV’s from GM. Mostly fully loaded stuff, (LTZ, Denali) and such. Some specific stuff, long box extended cab blah blah.

    They do need to boost some production clearly.

    Although that said we don’t need 550k of vehicles in Canada.

  • avatar
    fallout11

    When you are a hammer, every problem looks like a nail.
    Old adage is just as true here. What else is GM going to do?

    Looks like the PR campaign is working, GM stock is up considerably today.

  • avatar
    holydonut

    Could be a response to the government putting pressure on GM to use those taxpayer loans in order to trickle some benefit into the supplier base.

    GM’s argues was that a failing GM would result in jobs lost in the entire supply chain. But if they keep shrinking their production then many jobs are being lost in spite of the bailout monies.

    If this news had come out 20 months ago people would have guessed it was a stockpiling of inventory to protect against a strike. My how times have changed.

  • avatar
    peoplewatching04

    Maybe these are all the ‘free’ cars going to ex-employees that were bought out.

  • avatar
    menno

    All this is, is PR bullcrap to try to bring the price of the stock up from the sub-basement floor.

    Same thing about yesterday’s announcement about “not needing $2 billion” (no? Does that mean they’ll turn down the $16.8 billion coming to them at the END OF THE MONTH, then? Um. Didn’t think so….)

    As for the executive quote:

    “Vehicles that are being requested by dealers or customers are the ones where production would be increased,” GM spokeswoman Susan Garontakos said. “If you’ve got a lot of Saturn vehicles, you can bet we’re not producing those vehicles. There is not a ramping up of production of vehicles that we’re not selling. It wouldn’t make sense.”

    Wow. Just wow. What a brainiac.

    Clearly, stating the utterly obvious is apparently what passes for executive brainpower which means obtaining a great wage from GM (and a golden parachute which is bankruptcy proof); why the hell did I bother working for my current employer again?

    I’m sorry, folks, but these people make themselves out to be fish in a barrel.

    I cannot help but MOCK THEM MERCILESSLY, since that’s what they deserve for utterly destroying so many thousands of livelihoods due to their TOTAL INCOMPETENCE.

  • avatar
    Happy_Endings

    I guess they want to blow the 161 days of supply record out of the water. Make it something no one will ever approach.

  • avatar
    TVC15

    @ mikey
    How does that work anyway?The job banks are gone.Does GM just give them a regular paycheck?
    Just wondering thats all.

    The “Job banks” cover layoffs. But, when plants are simply idled for a period of time the union workers still receive a great % of their wage (80-90% ?).

    This hits at the crux of both the over-production issue and the UAW issue. For domestic manufacturers it makes more business sense to build cars no one wants, than to not build them.

  • avatar
    CarPerson

    Wagoner getting low on dough to pay his henchmen that keep him in power?

    What would a corporate revolt look like in these modern times?

    500,000 people, give or take, seeing the company heading for a crash caused by an unending string of management idiocy take over buildings and have the top executives arrested? What???

    General Motors is headed into uncharted waters…

  • avatar
    gslippy

    If they can build up inventory to say, 640 days, they won’t need to build any 2010 vehicles.

    “There is not a ramping up of production of vehicles that we’re not selling.” Translation: “We’re also not building Pontiacs, and you can forget about the Volt.”

    Only if common sense breaks out.

  • avatar
    Ferrygeist

    FWIW, regarding the Volt: a local NPR affiliate in Pasadena has sponsorship ‘ads’ appearing on a show brought to us by the “2011 Chevrolet Volt,” followed by a bunch of pablum about saving the universe one carbon atom at a time or something.

    I don’t know what to make of this.

    Anyone?

  • avatar
    Eric Bryant

    20% market share in a 9M/year market still means 150,000 vehicles need to be built each month.

    GM (and most others) overbuilt in 4Q2008. That resulted in the inventory numbers that we’re seeing trotted around in this thread. The reaction in 1Q2009 was to built even fewer cars than were being sold. Now, there’s still some inventory out there – but it’s not like every single model has surplus on dealer’s lots. At some point, factories have to run – even the currently-depressed market doesn’t allow everyone to walk away from the task of building cars for the next 12-18 months.

    550K in 2Q2009 does seem a bit high, but not completely unimaginable depending on the production mix.


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