Mexico supplier problems prevent second-shift additions at GM truck plants
Detroit — Issues with the Mexico supply chain are preventing General Motors Co. from adding second shifts at its U.S. truck plants next week.
The automaker sent out an alert Thursday to GM Flint Assembly employees where profit-rich heavy-duty pickups are made, stating "there has not been a return-to-work date for remaining production operations," though a second shift was expected to be added next week.
In addition to Flint, GM's light-duty truck plant in Fort Wayne, Indiana, will not see an addition of the second shift next week because some Mexico suppliers aren't yet ready to support the addition.
The Mexico supplier chain issue was first reported by the Wall Street Journal.
United Auto Workers Local 598 Shop Chairman Eric Welter at the Flint plant said the second-shift addition was "delayed without reason," by the company but he anticipates the delay will be short.
GM said: "We continue to plan to ramp up production in a gradual cadence. But we don’t share specific production plans and schedules."
GM, Ford Motor Co. and Fiat Chrysler Automobiles NV progressively restarted their assembly plants May 18 after an eight-week coronavirus-pandemic-induced shutdown. The restart, in the midst of a health crisis, was expected to come with some issues because of the complexity of the auto industry's supply chain.
"I expected it to be rocky but I am often amazed at how adept supply-chain managers are at dealing with all of these things," said Kristin Dziczek, vice president of industry, labor and economics at the Ann Arbor-based Center for Automotive Research. "In my mind, never underestimate the supply-chain departments at the automakers and big suppliers because they work miracles. But they've got a lot miracle-working ahead of them."
The gradual restart comes as inventory levels of trucks for GM and other automakers grow slim, according to an early-May Cox Automotive analysis. GM had a solid first quarter of truck sales despite the pandemic; sales of its Chevrolet Silverado pulled ahead of Fiat Chrysler's Ram, which beat Chevy's sales in 2019. GM was left with only a 68-day supply of the Silverado and a 59-day supply of the GMC Sierra, according to Cox.
More than half of GM's North America revenue — about $65 billion annually — comes from truck sales, the automaker has said.
Michigan suppliers were allowed by the governor to restart production May 11 to prepare for the May 18 auto assembly plant restart. Mexico suppliers and automakers have to submit a coronavirus safety plan to the Mexican government for approval before restarting.
General Motors de México said Thursday it would restart manufacturing complexes gradually with engine and transmission plants in Ramos Arizpe and Silao complexes starting Thursday, and assembly plants beginning operations Friday.
The restart date of operations for the GM manufacturing complexes in Toluca and the Mexican state of San Luis Potosí are still being determined.