By on August 28, 2009

When GM released the Chevrolet Traverse, it ended speculation about the American automaker’s ability to stay on the “no badge engineering” band wagon. The CUV is a lightly-disguised fourth iteration of GM’s Lambda-platformed mini-behemoths, appearing after the GMC Acadia, Buick Enclave and Saturn Outlook. Equally important, the Traverse hailed from GM’s Spring Hill, Tennessee, factory; ground zero in the epic failure known as Saturn brand. Or, more poignantly, the plant that’s located smack dab in the middle of Senator Bob Corker’s patch. You remember Corker: the politician who raked Chrysler, Ford and GM’s CEOs over the congressional coals when they appeared on Capitol Hill with their multi-billion dollar “bridge loan” begging bowls. All of which is a preamble to the fact that GM’s removing Chevy Traverse production from Spring Hill and sending it to Delta Township in Lansing, Michigan. Payback? Or a sign of a dead model walking? Yes and maybe, as the sales numbers reveal . . .

Automotive News [sub] reports July sales for the Traverse at a relatively healthy 6,690 units. That’s down slightly from June’s 7,045. And off May’s 8,204 pace. All told, since its October launch, Chevy’s sold 47,369 Lambdas. The Traverse inventories are high; not a good sign. July’s 82 days’ selling supply is a reduction from June’s 104-day stat, but it still represents a hell of a lot of units on the ground.

Taking Traverse production off-line will reduce those numbers. It will also delay the appearance of 2010 model year vehicles, which would steal sales from, and put downward price pressure upon, unloved ’09s.

But the best indication of GM’s faith in the model—or lack thereof—comes from spokesman Chris Lee. When Automotive News [sub] asked Lee how long it would take Traverse production to traverse the country, the flack was worryingly vague: “I can’t give you the exact time frame it’ll be down, but it’ll be a couple months if not longer.”

No rush, then.

Meanwhile, we know of at least one politician who’s not a happy camper today. It’ll be interesting to see Senator Corker’s reaction to the pull-out, and what he’ll do when New GM come a beggin’ for more bailout bucks. Or more federal subsidies to make the Chevy Volt look profitable. Or look for a little traction on its application for billions of dollars worth of Department of Energy re-tooling loans.

That sort of thing.

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19 Comments on “GM Stops Chevy Traverse Production for Two Months. Or More....”


  • avatar
    texlovera

    A minor quibble: US Senators don’t have “districts”. But the point made still stands.

    However, I give him credit for advocating prudent fiscal policy, rather than just blindly handing out more money to a failing(?) plant.

  • avatar
    greenb1ood

    texlovera:
    Was Corker really coming at the issue from a fiscal responsibility angle, or one that reflected the fact that Tennessee is home to Nissan’s NA Headquarters and a new VW factory was just finished?

    I have no doubt that Corker would have been silent had Carlos Ghosn been sitting at the table with GM, Ford, and Chrysler.

    Not that I agree with the bailout, but you have to remember that with politicians, it’s rarely actually about principles.

  • avatar
    Buick61

    The sales numbers don’t reveal a “dead man walking.” It outsold its chief rival, the Honda Pilot, for cryin’ out loud.

    And, as you pointed out, the days supply of them shrank by 21% in the course of just one month.

    Further, consolidating production is a good thing.

    I respect Mr. Farago, but, based on the information presented and the overall state of the market, I reject his conclusions.

  • avatar

    Sales are down across the industry. GM will earn a lot more money running a single plant at high capacity than two plants at low capacity.

    The part I don’t get is that they’ll be running overtime in the weeks before the plant shuts down, to build up inventories.

  • avatar
    Juniper

    This looks like business as usual. A model change over shutdown. They are just notifying everyone that it could be longer if needed to control inventory. Good management.

  • avatar
    John Horner

    “However, I give him credit for advocating prudent fiscal policy, rather than just blindly handing out more money to a failing(?) plant.”

    These guys are only for “prudent fiscal policy” when it suits their other interests. Just like they are for “family values” unless their own actual family is involved.

    Tooling up Spring Hill for the Traverse was a stupid move from the start. But one in a very, very long series of executive decision making blunders which caused GM to get into the mess they are in.

    “And, as you pointed out, the days supply of them shrank by 21% in the course of just one month.”

    And a very special month it was. I wonder how many Traverse sales were thanks to the C4C program. That program was tilted heavily towards purchasers of vehicles like the Traverse. The odd part is that so many people thumbed their noses up at the big vehicles and went for the small stuff even though the C4C rules were tilted very heavily in favor of buying new crossovers.

  • avatar
    Buick61

    John Horner: “And, as you pointed out, the days supply of them shrank by 21% in the course of just one month.”

    And a very special month it was. I wonder how many Traverse sales were thanks to the C4C program. That program was tilted heavily towards purchasers of vehicles like the Traverse. The odd part is that so many people thumbed their noses up at the big vehicles and went for the small stuff even though the C4C rules were tilted very heavily in favor of buying new crossovers.”

    Well that’s patently not true. First of all, the days supply data largely predates the C4C extravaganza, seeing as CARS was only in existence for one week in July.

    To calculate Days Supply, Automotive News takes the previous month’s sales data and uses it as an estimation of how long it would take to sell out of the vehicle given how many units are on dealer’s lots, in the supply chain, or are in ports/holding lots.

    Second of all, you have no idea how many C4C deals involving the Traverse, so we can’t say if it was a particularly special month for it. The 4 days it was running in July really couldn’t have swayed the days supply by that much, I suspect.

  • avatar
    Morton69

    Uhh…hmmmm….some of the facts not reported correctly in this column. Let’s get them corrected, shall we. At the end of July GM reported a 68 day supply of Traverses…not the higher figure you report and a number that is a little low given how it is selling. At its current rate GM will sell over 80k traverses this year, a figure any automaker would take. And as Automotive news reported, GM is actually adding a 3rd shift to Spring Hill to up the supply of Traverses while they move production to Lansing. Look, it is expected that posts on this blog will blast GM in every way possible but as a guy without a dog in that fight and yet appreciates good reporting I think you at least owe it to your readers to be accurate. That’s only fair afterall.

  • avatar
    superbadd75

    At least the Lambdas are well built, nicely designed, and have enough differences visually to trick people into believing that they’re different. The Traverse is a nice vehicle, and I’d personally pick it over the homely Pilot any day.

  • avatar
    mattstairs

    Yes, Corker was one of the prime opponents of the auto bailouts. He insisted on cost parity with the transplants and thought a managed BK would be a good idea.

    Isn’t it funny how those who advocated a managed bankruptcy back in 2008 (and were villified for it) received any credit (or apologies) in 2009 when the Obama Administration did just that?

    Corker did lose his principles though when GM did its little Michigan vs. Wisconsin vs. Tennessee game for the small car plant. He was very willing to throw some tax credit $ at the problem then.

  • avatar
    P71_CrownVic

    The Traverse has excellent sales numbers. Best in class I believe.

    It sure outsells the “on-sale much longer” Flex.

  • avatar
    Buick61

    So, what everyone is saying is, this is a non-story.

  • avatar
    ChristyGarwood

    Based on my experience at GM, all suppliers build a bank of inventory when tools move from one location to another — Manuf. Engrg. 101. So it goes with assembly tool moves from TN to MI.

    Regarding differentiation of the four full size crossovers that will be built in Lansing Delta Township – I have personally driven or ridden in Saturn Outlook, Buick Enclave and Chevy Traverse. My personal opinion of the ride performance is that the Outlook sways on soft swells on a sea, as if you are on a catamaran cruise from Sugarloaf Key to the Gulf Stream.

    The Enclave is more along the lines of the gas turbine engine powered hydroplane boat ride out of Bar Harbor to the Georges Bay, the faster you go, the more it glides as you hover over the sea.

    And the Traverse was specifically tuned to European standards, tight in turns, quick response, snug to the pavement, and able to take the bumps of dry, washboard dirt roads with minimal jarring – similar to those airboat tours in the Everglades.

    As to exterior styling, I see differences highlighted if you look at a cocoa-brown colored Enclave, gunmetal-grey Traverse, red Outlook and white Acadia. Some colors wash out some style lines and blur the differences.

    Interiors are definitely different across the four and are best assessed live, in person.

  • avatar
    V6

    The Traverse is hideous. That tall rear end, letterbox rear window and huge blank tailgate are not attractive.

    The Acadia is the Lambda pick

  • avatar
    esager

    The Traverse is hideous. That tall rear end, letterbox rear window and huge blank tailgate are not attractive.

    The Acadia is the Lambda pick

    But the Acadia has those terrible tail lights with the internal “turbine vents” that shout “low rent” – plus the thing is HUGE! I couldn’t get the Buick version in my garage when I had a loaner (Minivan in for bodywork)…

  • avatar
    mattstairs

    I think GM did a nice job styling the Lambdas, although with future Cadillac versions it is fast approaching the (Trail)Blazer/Bravada/Rainier/Envoy/9-7/Isuzu ? level of rebadge silliness.

    Not sure what is the purpose of having both the Acadia and the Enclave sold at the same dealers.

    BTW, I saw a Terrain in person today. Blecch. The Equinox is much nicer looking.

  • avatar

    I think that GM did a nice job with the Traverse … For me it looks like the Audi Q7 from outside.

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