"We're taking aggressive steps to accelerate our inventory initiatives that have worked well since the first of the year. 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," Troy Clarke, GM North America president said in a statement quoted by Autonews.
The move is a bit surprising because, even though GM says it was planned since the beginning of 2009, it surely comes sooner than expected. This is because GM's new CEO, Fritz Henderson, decided to step up the process.
To cut down production by 190,000, GM will have to close 13 plants in the US in the second and third quarter of 2009. Plants which are assembling new or redesigned vehicles (Chevrolet Camaro, Buick LaCrosse, Chevrolet Equinox and Cadillc SRX) will not be affected by these measures.
The company hopes to reduce its inventory from 767,000 vehicles at the end of March to 525,000 units by July. To do this, plants will be closed unevenly, for periods in between one and nine weeks.
Speaking about what has come to be called the Delphi case (bankrupt GM supplier), GM is pessimistic about the prospects. "Without the successful resolution of this dispute, it is General Motors' view that Delphi or its lenders could force GM into an uncontrolled shutdown, with severe negative consequences for the U.S. automotive industry," GM's statement said.
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