GM Gets the Go-ahead for a Mexican Restart, but Production Hinges on Suppliers
General Motors received good news on Thursday, earning approval from the Mexican government to fire up its extensive manufacturing presence in that country after weeks of coronavirus downtime.
The green light to resume production will help the automaker restock its all-important pickup shelves, though assembly won’t turn on a dime.
As reported by Reuters, production could begin as early as Friday at the Silao and Ramos Arizpe plants, home to the Chevrolet Silverado 1500, Blazer, and Equinox, as well as associated powertrain facilities. Last week it was reported that GM had its eye on the current week for a restart, even though Mexico had shuttered manufacturing operations through the end of the month.
To reopen, first a manufacturer must earn the privilege — and it seems GM de México’s virus-fighting health protocol satisfied government officials. “After nearly two months of suspension of activities, we are reopening our manufacturing complexes while implementing the most strict protocols of health and security,” Francisco Garza, CEO of GM’s Mexican arm, said in a statement.
The news comes as U.S. parts supplier Lear also earned a clean bill of health, allowing it to reopen a Mexican facility that counts Ford among its customers.
While GM said production could commence as early as today, vehicles won’t start moving down the assembly line until there’s parts with which to build them. In some cases, that could take a while. The automaker said a reopening date for its Toluca and San Luis Potosi plants remains hazy on account of this. Those facilities host powertrain production, as well as assembly of the GMC Terrain, Chevrolet Equinox, and Chevy Trax.
Getting the Silverado plant up and running ASAP is of top importance to GM, given the demand for the model and its sizable margins. In past weeks, dealers in the U.S. have begun complaining of dwindling pickup inventory — a shortage of a key product whose popularity kept the Detroit Three from feeling the worst effects of the pandemic during the extended lockdown.
At last report, full-size pickup demand in the U.S. was down only 7 percent compared to pre-virus forecasts.
[Image: Chris Tonn/TTAC]
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The bigger suppliers of things like brake assemblies should be up and running soon. It's the suppliers of little things like clips and brackets who will take longer to get back in business, if they survive at all. They're small companies least able to take the financial hit of the extended shutdown.