GM Pauses Full-Size Truck Production to Keep Market Hungry

With production pauses becoming commonplace during the pandemic, automakers realized they could effectively starve the market while demand reached dizzying highs that allowed the industry to trim overhead and forego factory incentives. Unfortunately, this also meant consumers were given less choice and often had to pay more – whether or not they found what they wanted on dealer lots.

Many automakers have stated that they won’t be going back to robust vehicle inventories and would instead continue attempting to run lean in order to maximize profitability. With exactly that in mind, General Motors has opted to suspend production at its Fort Wayne, Indiana truck assembly facility. The pause will last two weeks (impacting the Chevrolet Silverado and GMC Sierra) and help the company “maintain optimal inventory levels.”

The shutdown is scheduled to commence on Monday, March 27, and is reported by Autoweek to be in accordance with provisions of both national and local UAW bargaining agreements. Though the outlet noted that some of those updated provisions weren’t particularly well-liked by union members – as they effectively encouraged more downtime.

"That [jobs banks] program had required automakers put employees who would have been laid off into a program where they still got full pay," Cox Automotive Executive Analyst Michelle Krebs said. "Eliminating that program gave the domestic automakers more flexibility to idle plants when inventory was high or for whatever reason."

While those changes made life harder for people working the assembly line, it seems to have worked out well for automakers and arguments have been made that it’ll likewise help the industry avoid another crash like the one witnessed in 2008. But inventories that are considered high by modern standards are significantly smaller than what would have been considered normal just a few years ago. GM CFO Paul Jacobson, previously said the company would target 50 to 60 days' inventory through 2023 – roughly 30 days shy of what would have been normal in 2019.

For now, the automaker’s other full-size truck plants (located in Michigan, Canada, and Mexico) will continue operations while Indiana goes on hiatus. General Motors has said that it would constantly review and adjust production schedules to see if subsequent idling would be necessary. But has no plans beyond the two-week shutdown at present.

[Image: Jonathan Weiss/Shutterstock]

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from TheTruthAboutCars https://www.thetruthaboutcars.com/cars/news-blog/gm-pauses-full-size-truck-production-to-keep-market-hungry-44499619?utm_medium=auto&utm_source=rss&utm_campaign=all_full