By on September 26, 2017

2017 Cadillac XT5 - Image: Cadillac

Layoffs at an assembly plant producing recently redesigned midsize crossovers? Seems an unlikely scenario. But that’s what General Motors is doing in Spring Hill, Tennessee, where the automaker builds the Cadillac XT5 and GMC Acadia.

GM has announced it is cutting the plant’s third shift for an undetermined length of time starting in late November. The move comes just eight months after Spring Hill added hundreds of workers for that very same shift. While it might appear that demand for the vehicles is drying up, the numbers tell another story.

The newly downsized Acadia went on sale in May of 2016 as a 2017 model. Sharing its C1XX platform is the Cadillac XT5, which replaced the SRX at roughly the same time.

Compact crossovers side, few segments are hotter than the midsize crossover market, meaning both the XT5 and Acadia face plenty of competition in the premium and near-premium class. Still, both models wasted no time in eclipsing their predecessors’ sales figures.

2018 GMc Acadia - Image: GMC

The XT5 is by far Cadillac’s best-selling model, posting August sales of 7,236 vehicles in the United States. That’s a 47-percent year-over-year jump, making it the country’s second-best selling premium utility vehicle. As for the Acadia, the 9,497 vehicles that rolled off the lot last month is 21 percent higher than the model’s five-year August sales average, though sales over the past year haven’t been the most consistent.

Between August and December of last year, Acadia sales doubled to over 12,000 units. Winter, as expected, saw sales cool off, though March and April returned sales above the 10K mark. In June, sales reached a year-to-date low of 7,884 before picking up again in late summer.

Buyers aren’t ignoring either model. The problem is more an issue of GM having built too many than of customers wandering off the dealer lot in search of other crossovers. Keep in mind that overall auto sales have fallen every month this year in the U.S.

According to Automotive News, GM has 68 days’ worth of XT5s and 105 days’ worth of Acadias in inventory. That’s slightly higher and significantly higher, respectively, than the 60-day industry ideal. With the plant’s third shift coming online after last December’s sales peak (for both models), the company now finds itself a little overstocked.

“This adjustment allows the plant to maintain stable production, protect the value of our brands in any sales environment, and to provide the smallest impact to plant employment going forward,” GM said in a statement.

GM spokesman Tom Wickham told Automotive News that the layoffs are a combination of temporary and permanent employees. At the same time, he confirmed the automaker will invest $294 million into Spring Hill ahead of next year’s launch of the Cadillac XT4 — a compact crossover positioned below the XT5.

Whether or not the third XT5/Acadia shift returns, jobs certainly will.

[Images: General Motors]

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15 Comments on “GM Cuts Third Shift at Spring Hill Plant, but Not Because the Cadillac XT5 and GMC Acadia Are Tanking...”

  • avatar

    Make America Great Again!
    What is happening???

  • avatar

    The current Acadia is a handsome wagon…but I’m always bugged when the rear glass doesn’t line up with the rest of it. Explorer is probably the most prolific example. It just looks odd, like they took a sedan and slapped a box on the back.

    • 0 avatar

      It is quite the looker. They just redid the Terrain and that is pretty attractive as well, though I wish they offered it with the corporate V6, RDX style. The Sierra is a good looking truck too. GMC’s whole lineup is pretty solid

  • avatar
    SCE to AUX

    “…the company now finds itself a little overstocked”

    As usual. The same thing happens with their trucks, the Camaro, the former ELR, the Malibu, etc, etc.

  • avatar

    Same storey. Same GM.

  • avatar

    Correction….The XT4 is being built in Fairfax Mo. The investment in Spring Hill is to build the larger XT6/7 or whatever it’s called

  • avatar

    Like the SRX before it, this is Cadillac’s best product by far, but on a relative basis, as most CUVs , whether from Audi, MB, BMW, Lexus, Acura, etc., are ho-hum and boring vehicles.

    The XT5 has the added advantage this year of being actually (again, relatively speaking) attractive exterior-wise, particularly when side-by’side with hideous monstrosities such as the new Lexus RX (with its hideous, gaping maw).

    I think Cadillac going to a smaller CUV than this is a risk and a mistake, however – this should benches smallest Cadillac CUV.

    • 0 avatar

      I agree, but they looked at Sigma CTS and said, “no, it must be smaller!”.

      • 0 avatar

        I also agree with 28CL.

        The move from the 2nd gen CTS to the 3rd gen CTS + ATS really, really hurt Cadillac.

        The end gen CTS was far more successful than the 3rd gen, and by pushing the 3rd gen price up significantly while offering a too-tight (and harsh riding, unreliable) ATS in addition to, Cadillac erred greatly.

        They will do the same thing with their CUVs if I know GM (and I do); they will not only offer a smaller, underwhelming XT4 (a rebadged Chevy 4-banger CUV with a distinctly non-premium feel despite much lipstick), but will go even further downmarket with a XT3, which will end up being a heavily-subsidized lease special ($209 a month sign and drive) that will feel even less premium than the already cheap feeling XT4.

        This is what they do.

        I drove an Audi A4 from Wednesday to Friday that positively embarrasses the ATS AND CTS, by the way.

        How can Audi get it so right, and Cadillac #FailSoGreatly.

        • 0 avatar

          I agree. I do wonder if in meetings the executives are simply told, here is this crap now make something out of it. Makes sense at least since around 2008, I really haven’t seen a Cadillac product strategy since around this time.

        • 0 avatar

          “I drove an Audi A4 from Wednesday to Friday that positively embarrasses the ATS AND CTS, by the way.”

          So, what are your thoughts on the A3? I’d figure the ATS would have been aimed at that instead of the A4.

          • 0 avatar

            The A3 is far too expensive for what it is, as Audi didn’t do enough to differentiate it from the Golf (it’s 30%-40% more expensive than a comparably equipped Golf, which is ridiculous).

            The Golf is an excellent vehicle in terms of driving dynamics, interior quality, exterior quality/assembly/fit-finish, gauges, switchgear, seat comfort, refinement, etc., and the only reason to spring for the ridiculous increase for an A3 is some perverse emotional need for AWD and/or the Audi badge.

    • 0 avatar
      Kyree S. Williams

      I agree. I think Cadillac needs to leverage those expensive-ass Alpha or Omega platforms and do a sub-Escalade RWD-based seven-seat crossover, in the vein of the Q7 or GLS-Class. Couldn’t hurt, right?

  • avatar
    Kyree S. Williams

    This makes good sense. GM suffers when it has a glut of products, because things get very hairy when the market shifts. Plus, the company then has to throw a bunch of discounts on the stock to get it moving, and then people balk when the incentives disappear (trucks being the exception, because those are sold with cash on the hood on principle). Keep inventories low and transaction prices high. FoMoCo has historically done much better with this, and I’m pleased to see GM get wiser in this regard.

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