By on August 19, 2009

After months of “deeper, harder, faster” cuts, GM is increasing its production numbers again. “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,” explains GM sales honcho Mark LaNeve. He tells Automotive News [sub] that output will increase 35 percent in the third quarter to 535k units, and “at least” a further 20 percent in the fourth. “And it’ll probably go up from there,” says LaNeve. “Our dealers are clamoring for more vehicles in every segment.” Camaro, Equinox, SRX and Buick LaCrosse are said to be in especially short supply as GM’s nationwide inventory hit 360k units. Though much of the inventory shortfall is the result of Cash for Clunkers, GM’s cup-o-optimism runneth over.

“We look for pickups to continue to accelerate along with a recovery in the housing industry and overall economy,” says LaNeve. And he’s not kidding. The Arlington [Texas] Yukahoburbelade plant is getting overtime this month along with Fort Wayne’s Silverado/Sierra production. CAMI is adding shifts to increase Equinox/Terrain production while Lordstown is bumping up Cobalt production. Orion Township, which was due to be shuttered in September for retooling, will continue to pump out Malibus until November.

“We’re adding 60,000 units to our production schedule,” LaNeve says. “We’re probably not done, but this is what we’re ready to talk about today.” And when Cash for Clunkers plays out and leaves a smoking crater where all those pulled-forward sales used to be? GM will go back to right-sizing, shift-cutting, inventory management, fire sales, channel stuffing and the other depressed-cycle tricks of the trade. Meanwhile, enjoy the buzz.

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25 Comments on “GM Increases Production as Inventories Fall...”


  • avatar
    mikey

    In Canada more jobs and OT translate into more taxes flowing into the Provincial and Federal treasury.

    The taxpayers of Canada are at least recieving a dividend from thier investment.

  • avatar
    1169hp

    I knew mikey would be pleased.

  • avatar
    Billy Bobb 2

    Did ya hear? We’re Leasin’! C’mon Down!

    This time around, the pressure is off. No residual worries. When the hammer price is short, Uncle Sugar makes up the difference.

    GMAC’s new lease portfolio will resemble Bernie Madoff’s scratch paper.

  • avatar
    Geo. Levecque

    Mikey should not be too concerned as he is now on Pension,but I do agree that with all the overtime the GM Plant in Oshawa is requesting and its probably mandatory as well that the Governments in question will be raking in the extra Taxes.
    That aside I note that the List of Cars purchased on the USA Clunkers program, there are no GM or Fiat Chrysler vehicles listed either.
    People buying new Vehicles still have to pay for them by making monthly payments whether Sold or Leased and if so many people have no jobs, one wonders where the Money is coming from to make these decisions?

  • avatar
    50merc

    Mikey is right. Prosperity is good for everyone.

  • avatar
    oboylepr

    Increasing Cobalt production???

    I thought it was a cash for Clunkers program not
    a Clunkers for cash program. Maybe it’s a clunkers
    for clunkers program. Anyway the so-called ‘investment’ by the Canadian government is anything but that. When you invest in something you expect to make money at some point down the road. It will be a miracle if the Canadian (or US government) break even on this deal.

  • avatar
    mikey

    @ Geo. Levecque… As a GM Canada retiree I’m very concerned. My full pension is conditional on GM Canada remaining a viable company. Our pension fund is a better picture than it was,but it still not pretty.

    Hourly, salary,retiree,on both sides of the border. I think I speak for all,when I say,this is the BEST news we have heard in a LONG time!

  • avatar
    Samuel L. Bronkowitz

    I hope this is good news, but I’m naturally skeptical.

    How much of this is just artificial demand from the cash-for-clunkers program?

  • avatar
    ConejoZing

    “And though much of inventory shortfall is the result of Cash For Clunkers, GM’s cup-o-optimism runneth over.”

    Perhaps there… could be hope. We shall see! GM reinvent yourself!

  • avatar
    Jeff Puthuff

    “And when Cash for Clunkers plays out . . .”

    As if! Mo’ money is just a pen stroke away. Just ask our German friends.

    EDIT: I also believe the terms of the program will be changed to include older vehicles/relatively more efficient ones when C4C trade-ins start waning.

  • avatar
    segfault

    My crystal ball says they’ll end up with a year’s worth of inventory on those models.

  • avatar
    John Horner

    “And when Cash for Clunkers plays out and leaves a smoking crater where all those pulled-forward sales used to be?”

    Mike Jackson of AutoNation disagrees with that characterization of the situation. He gave an interesting interview on CNBC. Watch the whole thing, not just the snarky CNBC I Hate the Government intro bits.

    http://www.cnbc.com/id/15840232?play=1&video=1219289342

  • avatar
    Lokkii

    Hmmm . . .

    With the exclusion of the Cobalt, I can’t imagine that the vehicles cited above for increased production are those whose inventory was reduced by the C4C program.

    Camaro, Equinox, SRX ,Buick LaCrosse,Malibu, Silverado/Sierram, Equinox/Terrain, and “Yukahoburbelade”

    So even grumpy cynical I think that this is pretty much unadulterated good news for GM.

  • avatar
    PickupMan

    A nice fire-sale price on a new Equinox might be just the ticket once lots are bulging again and the easily persuaded have their C4Cmobile.

  • avatar
    brettc

    That’s weird… Home Depot and Lowe’s both reported pathetic results and almost 10% drops in same store sales for Q2. And they apparently don’t see it getting any better very soon. Good that GM thinks that everyone’s gonna need a new truck soon.

    And I drove by Cami a couple weeks ago and it looked like they had plenty of completed vehicles completed in their lot. I can’t believe that they need to make more Equinox(es).

  • avatar
    Bunter1

    Glad to see that the “New GM” has become pro-active and shed their reactive/move to late ways.

    ;^D

    When the pull-forward rubber band snaps back this will be nasty. If Prez Goodwrench & the Critters O’ Congress extend it a few times it may make this Q1 & 2 this year look like the good ol’ days.

    And lets throw in enticing the public into adding additional debt burden at a time when we desparately need to shed it.

    Genius. Pure genius.

  • avatar
    kowsnofskia

    So let me get this straight: GM can only bring its inventory down to reasonable levels when the government intervenes, negotiates a fake “bankruptcy”, and hands down a hefty bailout dressed up as an envrionmental initiative?

    Does anyone seriously think that this sales growth and/or inventory reduction is driven by anything other than C4C (which itself is sort of like giving a massive dose of meth to an exhausted tweaker who’s already been up for a week straight)? Does anyone really think this is gonna end well?

  • avatar
    jkross22

    @ Bunter:

    And lets throw in enticing the public into adding additional debt burden at a time when we desparately need to shed it.

    Genius. Pure genius.

    Well said!

    Broken record warning: C4C is bad public policy, rewarding the very behavior that got us here (overconsumption). Proving yet again the road to hell is paved with intents like these.

  • avatar
    rudiger

    PickupMan: “A nice fire-sale price on a new Equinox might be just the ticket once lots are bulging again and the easily persuaded have their C4Cmobile.”Yep, maybe along around December after all the C4C cash/buyers are exhausted and the dealer inventories are overflowing along with lots of corresponding ‘cash on the hood’ to move the metal.

    A little patience usually pays-off handsomely.

  • avatar
    P71_CrownVic

    I think Ford is insanely stupid for doing this and I think GM is stupid for doing this as well.

    This is just a flash in the pan. Once C4C (finally) runs out…the automakers will be stuck with a GLUT of inventory…that nobody will be buying.

  • avatar
    Airhen

    Don’t forget more bailouts… it’s bound to happen.

  • avatar
    stuki

    I can see not wanting to fill up on c4c fodder, as its probably easy profitable sales right now, but new pickup trucks? Are then anywhere in America right now not overflowing in late model, ex construction guy owned, models? Is a “greening of our workman’s fleet” federal program in the works, or something? Or perhaps mpg limits on trucks allowed to work on Barney Frank’s latest ghettofication adventure? Or does the government backstop allow leasing to such complete deadbeats that even repo’ed 2 year olds can’t compete?

  • avatar
    tirving

    To all who complain about C4C: What’s a billion dollars here and there. No big deal. The new word is trillion, and billion is insignificant.

  • avatar
    chinar

    $1.7b / $ 4000 = 425000 units

    (i believe $ 1.7b is the amount used up for C4C so far)

    GM share 18% = 425000 * 18/100 = 76500 units

    60000 units added production seems about right

  • avatar
    jerry weber

    If the American car companies pulled sales from future months because of the clunker deal, then what? Is it back to discounts by next year? If they cut production will there be any suppliers still left to make parts? Will they have to keep as GM and Ford are doing, putting hundreds of millions into these bankrupt former captive suppliers just to keep them and the parts alive? What will be the real price of the cars built at a lower volume and without discounts? When all of these questions are answered we will know if the new Govt program is once and done or will it have to be on going.


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