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GM to Reduce Full-Size Truck Production

Move to bring production in line with market demand
Company to explore options to expand car production

DETROIT – GM announced today that it is eliminating one shift of production at its full-size pickup truck assembly plants in Pontiac, Mich.; Flint, Mich.; and Oshawa, Ontario; and its full-size SUV assembly plant in Janesville, Wis. The decisions were made to bring production capacity more in line with market demand.

Under this plan, approximately 88,000 units of full-size pickup and 50,000 units of full-size SUV production will be removed from GM’s North American production capacity for the remainder of the 2008 calendar year.

Based on current plans, the shift reductions will be effective on the following dates:

Flint Assembly (Heavy Duty Chevrolet Silverado and GMC Sierra) – July 14
Janesville (Chevrolet Tahoe and Suburban, GMC Yukon, Yukon XL) – July 14
Pontiac Assembly (Chevrolet Silverado, GMC Sierra) – July 14
Oshawa Truck (Chevrolet Silverado and GMC Sierra) – September 8
The full-size pickup truck and full-size SUV segments have softened for the entire industry – down 15 and 26 percent, respectively, through the first quarter of 2008. Nonetheless, GM remains the segment leader in both instances, with nearly 40 percent share of full-size trucks and more than 63 percent share in the full-size SUV market.

“With rising fuel prices, a softening economy, and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities,” said Troy Clarke, president GM North America. “This is a difficult move, but we remain committed to retaining and growing our leadership position in the full-size truck market.”

Clarke noted that with the market shifting toward cars and crossovers, GM is seeing strong sales of the new Chevrolet Malibu, Cadillac CTS, Chevrolet Cobalt, Pontiac G6, Chevrolet Impala, Buick Enclave and GMC Acadia. He added that the company is continuing to explore options to increase car and crossover production, but there are no changes to car production at this time.

The full-size truck production cuts will result in lower staffing requirements at all four plants, and those details will be worked out over the next several weeks with the UAW and CAW.

GMMediaOnline
 

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Re: GM to Reduce Full-Size Truck Production

It sounds like it only takes an act of consumers-and not Congress-to shape GM's fleet. As gasoline prices rise, consumers are moving to more fuel efficient offerings from the General.

“With rising fuel prices, a softening economy, and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities,” said Troy Clarke, president GM North America. “This is a difficult move, but we remain committed to retaining and growing our leadership position in the full-size truck market.”
I like this statement. Just because the market is shrinking does not mean that GM should cede the market to anyone. It might mean that GM offers fewer FS trucks, but they should be the most compelling vehicles in their respective markets; let other manufacturers retreat.
 

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Re: GM to Reduce Full-Size Truck Production

Let's hope they can sell more cars to offset this. The real truck guys will keep buying trucks but I think the casual truck buyer won't be coming around until gas prices go down.(which is never!) I think its past the time we started drilling here in the states. New technology is coming out but gasoline will be the reality for a long time to come.
 

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http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/04/28/financial/f132011D51.DTL&tsp=1


GM to lay off 3,500 at 4 pickup truck and SUV factories



Sagging pickup truck and sport utility vehicle sales have forced General Motors Corp. to shut down one shift each at four North American factories and lay off about 3,500 workers.

The world's largest automaker by sales said Monday that the cuts, to take effect starting this summer, were brought on by weak demand due to high gasoline prices and an economic downturn.

The cuts will affect pickup factories in Pontiac and Flint, Mich., and Oshawa, Ontario, as well as the full-size SUV plant in Janesville, Wis. The layoffs represent just over 4 percent of GM's hourly manufacturing work force of about 80,000 in North America.

The company said the cuts mean it will make about 88,000 fewer pickups and 50,000 fewer large SUVs this calendar year.

GM said the exact number of layoffs will be worked out with its unions. Workers will get unemployment benefits and supplemental pay that total 80 percent of their normal 40-hour gross pay, said GM spokesman Dan Flores.

"With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities," GM North America President Troy Clarke said in a statement.

More at Link
 

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Pretty normal stuff in response to demand. GM has amde a killing off SUVs, but there is always a slowdown. Of course the big media outlets will be all over this one, telling us it is another nail in the coffin, blah, blah, blah...
 

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Re: GM to Reduce Full-Size Truck Production

If only they can move assembly line workers from the Suburban plant to the Traverse/Acadia plant.

The only people buying Suburbans now are people who actually need them.
 

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I've often wondered why GM is slow to respond to the market.
Is it something inherent in the car business? Or are they just slow to respond?

My company saw the economic slowdown back in December and froze all hiring January-mid-March, lifting the ban for certain position in mid-March. It's something they do to ensure that the company is properly staffed and we don't "overhire."

If GM saw this coming back in January, they could have started slowing production back in Jan or Feb, instead of letting inventory pileup?
But I guess that could be a symptom of the auto industry as a whole?
 

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I've often wondered why GM is slow to respond to the market.
Is it something inherent in the car business? Or are they just slow to respond?

My company saw the economic slowdown back in December and froze all hiring January-mid-March, lifting the ban for certain position in mid-March. It's something they do to ensure that the company is properly staffed and we don't "overhire."

If GM saw this coming back in January, they could have started slowing production back in Jan or Feb, instead of letting inventory pileup?
But I guess that could be a symptom of the auto industry as a whole?
They are like a large freight train...It takes time. ;)

Actually, there are a variety of issues at play. Just because they forsee the slowdown doesn't mean they can slam on the brakes immediately. Lots of issues with production, marketing and unions...Not as easy as you would like it to be.
 

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They are like a large freight train...It takes time. ;)

Actually, there are a variety of issues at play. Just because they forsee the slowdown doesn't mean they can slam on the brakes immediately. Lots of issues with production, marketing and unions...Not as easy as you would like it to be.
I figured as much. But if GM really is coordinating with the union and suppliers much better these days, they should have been able to act quicker.
Sure... they're not going to turn/stop on a dime. But it's May now. if anything, they could have done this in March.

There are probably other extenutating circumstances. It's just at this point, there's the increasing inventory. And if the market really does tank, the inventory will really just sit there. And that's just not good.
 

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As GM reduces it's workforce in North America, they will increase the workforce probably substantially in Asia. Large pickup trucks and SUV's are unique to the North American market.

Don't forget GM is the number one car manufacturer in China and even some GM management thinks by 2020, China will be the largest car market in the world with India not far behind. In about 15 years GM may earn up to 75% of its profits outside of North America. And IMHO they will be a very profitable company at that time. Hardly a "nail in the coffin."
 

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Re: GM to Reduce Full-Size Truck Production

There is no doubt GM is in trouble on trucks. Not many consumers are out there buying a truck for personal use anymore unless they really need it when gas is $3.50+++.

That said, Toyota must be getting killed also with that brand new truck plant they just built in Texas. Ouch!
 

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When gm's large hybrid suv's and truck's actually become affordable to the average buyer i think we'll see a increase demand for bigger suv's and trucks.
 

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Re: GM to Reduce Full-Size Truck Production

GM is seeing strong sales of the new Chevrolet Malibu, Cadillac CTS, Chevrolet Cobalt, Pontiac G6, Chevrolet Impala, Buick Enclave and GMC Acadia. He added that the company is continuing to explore options to increase car and crossover production, but there are no changes to car production at this time.



I sure wouldnt mind them upping production of the Impala I havnt seen any overtime since last summer and it sure would be nice.
 

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It takes a while because the material used to manufacture those trucks and SUVs was purchsed last fall and winter. Some sub assemblies were built by suppliers as well. GM slowed up faster that Toyota and Nissan...
 

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I figured as much. But if GM really is coordinating with the union and suppliers much better these days, they should have been able to act quicker.

Sure... they're not going to turn/stop on a dime. But it's May now. if anything, they could have done this in March.

There are probably other extenutating circumstances. It's just at this point, there's the increasing inventory. And if the market really does tank, the inventory will really just sit there. And that's just not good.
We only wish they could react so quickly, but read below...

It takes a while because the material used to manufacture those trucks and SUVs was purchsed last fall and winter. Some sub assemblies were built by suppliers as well. GM slowed up faster that Toyota and Nissan...
Very well said.

As for the Mexico comment, get used to it. More and more assembly will be shifted to lower cost countries such as Mexico, China and India. We already know why that is happening. Just see the first link in my signature, if you forget. Best part, as someone else mentioned, is GM will be very profitable in the future. Control, and most of the profits, will still be in the U.S.
 

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I've often wondered why GM is slow to respond to the market.

Is it something inherent in the car business? Or are they just slow to respond?

If GM saw this coming back in January, they could have started slowing production back in Jan or Feb, instead of letting inventory pileup?
But I guess that could be a symptom of the auto industry as a whole?
They sort of didn't have to respond due to the American Axle strike mid to end of February which caused GM to slow down production anyways due to a lack of parts - didn't they?

DDL
 

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Maybe I am over-reacting to this, because it is all cyclical, but this should make GM rethink GMC/Chevy truck. GM cannot continue to build more vehicles than the market wants to buy. In this instance, having 2 divisions sell full-sized trucks and SUVs seems horribly wasteful. I am not saying that GMC should be eliminated, but they do need to be redirected/repurposed for these times of expensive fuel. Maybe GMC should revolve around crossover SUVs and crossover trucks, like the Acadia, Denali concept truck, and the upcoming, Vue-based Terrain compact crossover? They should probably lose the Envoy and Yukon XL, and seriously cut back on regular Yukon, and Sierra production. Chevy should be the focus of GM's traditional heavy-duty, and light truck business. Chevy should also consider dumping the Suburban, in favor of the Tahoe.
 
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