GM to trim inventory with 10 weeks combined downtime
New York — General Motors Co. will shutter some U.S. plants for a combined total of 10 weeks of production time in the second half of the year, a move that will help balance swelling inventory levels, the automaker’s North America president said.
Plants that may be affected include Fairfax Assembly Plant in Kansas City, Kansas; Fort Wayne Assembly Plant in Roanoke, Indiana; and Lordstown Assembly Plant in Ohio, according to analysts and local unions. More downtime is possible at GM’s Lansing Delta Township Assembly Plant which is adding all-new 2018 Chevrolet Traverse and Buick Enclave SUVs.
The Detroit automaker’s inventory levels have ballooned to 926,170 vehicles or 98 days’ supply at the end of March, up from 900,681 or 91 days’ supply at the end of February.
“Our inventory’s high because we’re going to take 10 weeks out in the back end of the year as we’re modifying our plants particularly in pickup trucks,” GM North America President Alan Batey said Tuesday at the introduction of the 2018 Buick Enclave at the New York Auto Show. “To be able to cadence that, we have needed to build inventory up a little bit right now because in the back end of the year we’re going to lose 10 weeks of production.”
GM and Batey did not identify the plants that would be impacted by production downtime, or the models that specifically would be targeted.
The automaker in recent months has cut shifts at car plants to trim inflated car inventory.
Batey said the downtime will help reduce inventory levels by the end of the year to about the mid 70-day range. The 60- to 70-day range is a target analysts consider healthy.
The Fort Wayne plant is part of GM’s production-cut target and will be down for several weeks for work related to launch of new product, according to a source familiar with the automaker’s plans who asked to remain anonymous because the news has not been shared publicly. Production at Fort Wayne in the third quarter is estimated to be down nearly 50 percent or more than 46,000 units from the same quarter in 2016, according to IHS Markit information obtained by The Detroit News.
GM builds full-size and heavy-duty versions of the Chevrolet Silverado and GMC Sierra pickups at the Indiana plant. GM also has full-size pickup plants in Flint and in Mexico.
The automaker had a 115-day supply of the Silverado pickup — one of its top sellers — at the end of March, up from 78 days the month before, according to Autodata Corp.
The downtime for at least some truck plants is an indication the company may be prepping its factories for the next-generation full-size pickups. Batey would not say when those new trucks will be out. Some analysts say GM is planning to launch new full-size trucks for the 2019 model year.
The automaker also is slated to cut production at the Fairfax plant, where it builds the midsize Chevrolet Malibu sedan.
Malibu inventory levels totaled 124 days at the end of March, about double what analysts consider a healthy stockpile. A year ago, days supply of the Malibu totaled 42 days, Autodata Corp. said.
The Fairfax plant is slated to be down the weeks of May 22 and May 29, with a vacation shutdown planned from July 31 to Aug. 13 and another week of no production planned for the week of Aug. 14, according to UAW Local 31, which represents workers at Fairfax.
The local union, in an update on its website, said the plant also in August will go through a slowing of the rate of production and will have layoffs, though the plant is going to keep three shifts.
The Fairfax plant is expected to begin building a new Cadillac crossover called the XT4 sometime next year, according to analysts.
Separately, GM also will halt production at its Bowling Green Assembly Plant in Kentucky, which builds the Chevrolet Corvette sports car, for 13 weeks in the second half of the year for construction work, according to a source familiar with the company’s plans. Corvette inventory totaled 158 days at the end of March.