GM Reduces Truck Production Due to Unusually High Inventories
General Motors is cutting back on production at its Ford Wayne, Indiana plant that builds the GMC Sierra and Chevrolet Silverado pickup trucks, due to reduced demand and high inventories.
According to the UAQ Local 2209 site, the Detroit automaker has cancelled Saturday shifts at its plant. A person familiar with the plan told Autonews that Saturday shifts had been cut in half since the beginning of 2011
Analysts agree that a typical inventory for full-size pickups is about 80-days of supply. It seems that GM has overestimated demand for its trucks: in June its inventory there was a 122-day supply, falling slightly last month to 115 days.
GM’s sales chief Don Johnson explained that the unusually high inventory is due to the automaker’s expectation of an increase in demand in the second half of the year.
Johnson said he expects that by the end of 2011 the number will fall to a close-to-typical 90-day supply, or 200,000 units. The company is also stacking up its inventories for next year when some of its plants will be closed for weeks due to retooling for production of the next generation of pickups.
Story source: Autonews
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