GM truck plants work nearly non-stop to restock dealers after strike
Flint — After a 40-day strike depleted stocks of Chevrolet and GMC pickups, General Motors Co. assembly plants are working nearly non-stop to restock dealer lots and prevent loyal customers from shopping for a Ford or Ram.
Mandatory Sunday overtime has been invoked through Dec. 21 at GM's Flint Assembly plant, which builds heavy-duty Chevrolet Silverados and GMC Sierras. That plant already was running three shifts, six days a week.
Workers also are racking up overtime at Fort Wayne Assembly in northeast Indiana, where light-duty Silverado 1500 and Sierra 1500 pickups are built: Sunday production was scheduled for this past weekend. That plant is running three shifts, five days a week, with two Saturdays every month.
Some dealers are feeling the pinch after the prolonged strike, which ended Oct. 25. Greg Greenwood, owner of Greenwood Chevrolet in northeast Ohio's Austintown Township, is nervous about his truck inventory. During the first week of December, he had fewer than 10 Silverado light-duties and heavy-duties on the lot. He usually keeps more than 100 pickups in stock.
"We don’t have any cars to pull us out, so if we don’t sell trucks we are in trouble," Greenwood said, noting that he's entering "problem-solving mode" to try to find more inventory to sell.
At the beginning of October, GM had a relatively strong 84-day supply of trucks, above the industry's average of 69 days, according to Cox Automotive. Current inventory figures were not available, but supplies of heavy-duty pickups are especially tight because the automaker only had a few months to ship the all-new trucks before UAW workers walked out in mid-September.
"The bottom line is our customers cannot and will not wait any longer to make a purchase," Flint Plant Manager Mike Perez and UAW Shop Chairman Eric Welter wrote in a Nov. 27 note to Flint employees in which the emergency overtime was announced. "As a leadership team, we feel it is crucial to act now to identify a scheduling solution that will help feed market demand without compromising the quality and safety of our team."
Under the new labor UAW-GM contract, mandatory overtime is allowed when production is lost in emergency situations, including a strike. In the nearly six-week work stoppage, 48,000 UAW workers picketed 55 GM facilities. The strike cost GM $3 billion and lost production of 300,000 vehicles.
With the strike hitting just a few of months after GM started shipping its heavy-duty pickups to dealers, it's not surprising that Flint's plant would have to run non-stop. "They have ground to make up," Cox Executive Analyst Michelle Krebs said.
"Trucks are incredibly important to the Detroit Three because that’s where they make their money," she said. "Because so many trucks are used for work and business, having the right truck for the customer on the lot is really important."
The demand for trucks is fueled by a strong economy and the tax benefits that exist for companies to purchase new fleets.
"We have seen a surge in fleet sales," Krebs said. "Business fleets are really buying heavily right now."
GM says it is doing its best to replenish the pipeline quickly.
"This is a very competitive segment and we certainly don’t want customers going to another brand just because we are short on inventory," GM Spokesman Dan Flores said. "It’s in our best interest as a GM team to meet the demand while it’s there."
Outside of mandating overtime because of demand, GM announced in June a $150 million investment at Flint Assembly to increase production of its heavy-duty pickups by 40,000 per year. That announcement came two weeks after GM said it would invest $24 million at its Fort Wayne truck plant to up production of light-duty pickups.
GM and Isuzu Diesel Services of America said in late November they are investing $175 million for a new Brookville, Ohio, facility to expand production of engine components for its 2020 Chevrolet Silverado and GMC Sierra heavy-duty models.
"We are continuing to look for ways to grow the profitable part of our business," Flores said, "and what we are doing in Flint is part of the strategy."