GM to Throttle Back Production, Idle Plants as Car Glut Grows
(Update: This story has been updated to reflect new information.)
Not since the dark days of the recession has General Motors had so many vehicles clogging its inventory.
Bursting at the seams with unsold cars (but not trucks or SUVs), the automaker will temporarily turn out the lights at five assembly plants and kill off three shifts in order to bring things back into balance. For thousands of workers, that means the kind of extended Christmas holiday you don’t want.
According to The Detroit News, GM’s inventory stood at 874,000 cars, trucks and crossovers at the end of November. That’s the largest glut since 2008 — a dismal time when buying a new car meant you were either exceptionally lucky, or foolish.
The automaker’s inventory has ballooned in 2016, growing by 182,000 vehicles since this time last year. In fact, the ranks of the unsold grew by 40,000 units between Halloween and November 30. Naturally, incentive spending went through the roof in an attempt to clear out the glut, rising an average of 36 percent per vehicle in November, though it wasn’t enough to turn the tide.
Now, GM is forced to scale back production of numerous models.
According to the United Auto Workers, the automaker’s Detroit-Hamtramck assembly plant will shut down for three weeks in January, stemming the flow of the Chevrolet Volt and Impala, Cadillac CT6 and Buick LaCrosse. A second shift will be cut in March, leading to nearly 1,300 layoffs.
Both the Lansing Grand River Assembly Plant and Lordstown Assembly Plant will see a third shift cut next month, leaving a further 2,000 workers out of a job. The Lansing plant will also be idled for two weeks, Reuters reports, while Lordstown will see the lights go out for one week. Lansing builds the Cadillac ATS and CTS, both plagued with slow sales, and the heavily incentivized Chevrolet Camaro. While GM had an unhealthy 87-day supply of all cars in November, its Camaro stock could supply dealers for 177 days. Clearly, something had to give.
Autodata claims a 121-day supply of Lordstown-built Chevrolet Cruze models, while ATS and CTS inventories stand at 119 and 132 days. Overall, GM boasts a 105-day supply of its passenger cars, with 70 days being the industry ideal.
The automaker’s Bowling Green plant in Kentucky, which builds the Chevrolet Corvette, will shut down for a week next month, while its Fairfax plant in Kansas City will see a three-week shutdown. Fairfax builds the Chevrolet Malibu and Buick LaCrosse. In total, the shutdowns will idle about 10,000 workers.
While a certain automaker — *cough* Fiat Chrysler Automobiles *cough* — dealt with slow sales by killing off unpopular models, GM isn’t willing to go that route. As such, the public’s turn towards light trucks means pain in the heartland.
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