GM Boosting Production, Adding Shifts to Handle Anticipated Demand

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Researched by Industrial Info Resources (Sugar Land, Texas)--For most of this year, the news coming from General Motors Corporation (Detroit, Michigan) has not been good. Production cuts, employee reductions and bankruptcy proceedings have dominated the news for the struggling automaker in recent months. However, now that things have settled and the "cash for clunkers" program has boosted sales, GM is back on the offensive, announcing that it will be boosting production to make up for the production lost during the consolidation that occurred while the company was involved in bankruptcy proceedings. To that end, GM will be adding shifts at three plants to help make the proposed production increases. These shifts are in addition to the two shifts that GM previously announced it was adding.

During the fourth quarter of 2009, GM will add a shift each at the company's plants in Ingersoll, Ontario, and Lordstown, Ohio. In addition, shifts will be added at the Fairfax plant in Kansas City, Kansas, in January, followed by plants in Delta Township, Michigan, and Fort Wayne, Indiana, in either March or April next year.

The Ontario plant assembles the new Chevrolet Equinox and the GMC Terrain crossover vehicles, while the Lordstown plant assembles the Chevrolet Cobalt, GM's most fuel-efficient vehicle. The Fairfax plant assembles the mid-size Chevrolet Malibu, Saturn Aura and the Buick LaCrosse, while the Delta Township plant assembles the GMC Acadia and Saturn Outlook, both of which are large crossover vehicles. The Fort Wayne plant assembles pickup trucks.

As part of this massive reorganization, GM will shift the balance of the Chevrolet Malibu production at the Orion Township plant in Michigan (closing in November) to the Fairfax facility. In addition, Delta Township will begin assembling the Chevrolet Traverse when the Spring Hill, Tennessee, plant is shuttered in November. The Fort Wayne plant will add the heavy-duty versions of the GMC Sierra and Chevrolet Silverado to its lineup at the end of September with the closing of the Pontiac, Michigan, facility.

The change of production and the addition of shifts will add 800 jobs at the Delta Township facility, 900 jobs in Kansas City and 700 jobs in Fort Wayne. With the addition of a third shift in Ingersoll, Ontario, 350 jobs will become available while an additional 1,000 jobs are coming to the Lordstown plant when the second shift begins again in October. Overall, GM is hoping that these moves will allow the automaker to increase production from 1.9 million vehicles in 2009 to 2.8 million vehicles in 2010.

While sales have been slow this year despite the "cash for clunkers" reprieve, the industry is predicting that total U.S. vehicle sales will increase from 10.5 million vehicles in 2009 to between 11.5 million and 12 million vehicles per year in 2010. GM will continue to analyze its lineup in the coming months to assure it is making the most of production by producing the vehicles that the vehicle-buying public actually wants to purchase. A lack of connectivity with the vehicle buyers has been part of GM's recent problems.

At other plants in the GM network, production has been increased on the Chevrolet HHR small wagon, the Chevrolet Colorado midsized pick-up, the GMC Canyon mid-size pick-up, the Chevrolet Camaro, the Buick LaCrosse sedan, and the Cadillac SRX and CTS wagon. GM is trying to focus on more fuel-efficient vehicles while developing an electric vehicle lineup, the first of which will be the Chevrolet Volt, which is expected to begin production in 2010.

While it is good to see GM bringing back some of the workers let go in the last two years, the entire situation at the struggling automaker will be watched closely. GM's sales estimates for the coming year are quite optimistic given that consumers are still being cautious, and the buying public is not exactly beating down automakers' doors to purchase new vehicles. Hopefully, GM will learn from past mistakes and not over-produce, which could lead to a reduction of shifts at some point next year if vehicles are not selling.

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