DETROIT — General Motors Corp. has decided to extend the temporary summertime closure of seven factories because widespread temporary shutdowns will not be enough to control a burgeoning supply of some models, the company said Tuesday.
DETROIT — General Motors Corp. has decided to extend the temporary summertime closure of seven factories because widespread temporary shutdowns will not be enough to control a burgeoning supply of some models, the company said Tuesday. GM spokesman Chris Lee said the company will add up to four weeks to temporary shutdowns at the Detroit-Hamtramck; Lansing, Mich., Grand River; Orion Township, Mich.; Oshawa, Ontario; Lordstown, Ohio; Shreveport, La.; and Spring Hill, Tenn., assembly plants. The closures might not be the end of GM’s efforts to keep inventory down because of the slumping U.S. auto market, Lee said Tuesday. "We recognize our product output needs to be adjusted on a regular basis," Lee said. "We’ve been doing it now for 18 months, unfortunately, on a very regular basis. So by all means it’s possible." GM announced in April that it would temporarily shutter 13 assembly plants in the U.S. and Mexico — some for 11 weeks — laying off nearly 24,000 workers to pare back a bloated inventory. The latest round of closures, announced at the factories this week, range from one added week at the Oshawa, Ontario, factory to four additional weeks at the Lansing Grand River plant. Most of the factories will go down for three added weeks in July. In addition, the full-sized van plant in Wentzville, Mo., will see some shift reductions and then removal of the second shift starting on Aug. 10. Because the daily selling rate for GM vehicles is down due to the slumping U.S. market, it has a 92-day supply of cars and trucks, according to Ward’s AutoInfoBank. That’s down from a 123-day supply at the end of March. Industry analysts say a 60-day supply is optimal to provide enough of a selection but not so much that large incentives will be needed to move vehicles. GM’s sales are down 42 percent through the first five months of the year, while the overall U.S. market is down 37 percent, according to Autodata Corp. The Lansing Grand River plant, which makes the Cadillac STS and CTS luxury sedans, gets the longest shutdown of the latest round because inventories of its products are high. According to Ward’s, GM has a 106-day supply of the STS and a 98-day supply of the CTS. GM has been operating under Chapter 11 bankruptcy protection since June 1 as it seeks to reorganize and shed unwanted assets. So far it has received about $20 billion in loans from the U.S. government. ______ Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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