GM will idle 13 plants for up to 9 weeks
April 24, 2009 by Matt Brogan
General Motors, facing its worst sales performance in over 30 years and escalating financial woes, has announced today that it will cut 190,000 vehicles from its production schedule in the second and third quarters of this year.
To achieve this, GM plans to idle 13 plants for up to nine weeks each in an effort GM hopes will trim high dealership inventories and put production in line with slowing sales.
GM also said the cuts could help prevent a GM shutdown in case Delphi, GM’s troubled former parts unit, could not deliver parts because of its own financial problems.
“We’re taking aggressive steps to accelerate our inventory initiatives that have worked well since the first of the year,” said GM’s North American President, Troy Clarke. “While sales have been performing at or close to our plan estimates, and dealer inventories have been reduced accordingly, we want to more closely align our inventories with even more conservative market assumptions.”
Mr Clarke also said GM had planned to gradually reduce vehicle inventories at the start of 2009, but that GM CEO Fritz Henderson decided to accelerate the inventory reduction with the plant closings to help GM meet the goals in its viability plan.
GM consulted with President Obama’s Automotive Task Force, but was not given orders to shut the plants.
“It was an internal decision, part of reinventing GM, part of the viability plan,” said Mr Clarke. “We certainly advised the task force of our actions so that they are familiar with what we are trying to get done.”
Plants that assemble new or redesigned vehicles, including the Chevrolet Camaro, Buick LaCrosse, Chevrolet Equinox and Cadillac SRX will not be affected by the shutdown.
GM said it had 767,000 vehicles in inventory at the end of March and that sales are not likely to improve any time soon. The company hopes to cut its inventory to 525,000 units by July.
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Another huge step toward the restructuring of GM. With the pending bankruptcy and selling off of assets/brands, we are going to see a few big and sudden changes to the top 10 line up of manufactures. Will the VW group get to ride a slip stream to the second spot?
These are massive and deep cuts. So far there is lots of news about various buyouts and plans for all of GM’s brands But not a word on what the plan is for Holden.
GM will off-load Holden as it cant afford to keep a non-profit making brand. GM will emerge from bankruptcy as a small American car company making cars in America only. Or it will disappear altogether.
Limited slip ur kind of right because if they do that some one down under will snap up Holden at bargain prices and then get them back to where they should be. But GM should be allowed to survive just until the Camaro comes down under as a Holden and then they can quietly die away.
VW is alredy in 2nd spot, or even first by the end of this year!
American plants are not the only ones effected. Expect news from Holden in the near future regarding production of its European sourced Astra. Sad times ahead.
I think i would be keeping clear of any gm prouducts for a while, till everything settles down then we can see whats going on and how its all going to shape up ,would hate to be left high and dry
Oww..That’s too bad to hear. I think they really down. i know they can still survive.
Us auto newspaper autonews reports that GM is poised to dump Pontiac as soon as this week. I only hope that they decide to rebadge the Pontiac G8 the Chevy G8.