GM Will Idle Truck Plants Next Month to Reduce Inventory

The General will idle its truck-making plants in Michigan and Indiana for two weeks next month to deal with a large stockpile that reaches over 100 days’ worth in some cases, and to prepare the factories for output of 2012 model year vehicles.

Thus, Flint assembly in Michigan will shut down for the two weeks in July, said Tom Wickham, a spokesman for the Detroit-based automaker. Production at Fort Wayne assembly in Roanoke, Indiana, also will stop during those weeks, said Orval Plumlee, president of United Auto Workers Local 2209, which represents hourly workers among the factory’s more than 3,300 employees. The two plants are responsible for making Chevrolet Silverado and GMC Sierra pickups.

GM’s truck inventory was 288,000 units at the end of May, up from 275,000 on April 30. The inventory included 258,000 units of large trucks, or 110 days supply, Don Johnson, according to GM’s vice president of U.S. sales. With the industry standard sitting at 60 days, it’s no wonder that production will b idled.

“GM is rightly being quite careful about building products into the summer months and not getting caught with an excess amount of prior model year inventories,” said Michael Robinet, an analyst at IHS Automotive in Northville, Michigan, according to Bloomberg. “They’re going to be careful not to build too much of the older model year vehicles and have to discount them heavily in the face of having newer model year vehicles on the same lot.”

In an official company statement, Mark Reuss, president of GM’s North American operations, said the large inventory was acceptable, and that no large discounts are to come as a consequence.

“We’re not going to run big incentives to clear inventory,”
Reuss said on Mackinac Island in northern Michigan earlier this month. “We’ll adjust inventory on a production basis.”
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About the author: Mihnea Radu
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Mihnea's favorite cars have already been built, the so-called modern classics from the '80s and '90s. He also loves local car culture from all over the world, so don't be surprised to see him getting excited about weird Japanese imports, low-rider VWs out of Germany, replicas from Russia or LS swaps down in Florida.
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