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GM Trims Production on Two Factories Amid Rising Inventories

February 26, 2015
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General Motors Co. is cutting production at two manufacturing facilities due to increasing dealer inventories of certain models.

People with knowledge of the matter revealed that GM has scheduled the shutdown of the Orion Assembly production plant and the idling of the “Flex” assembly line at the Oshawa Assembly factory in Ontario.

The Orion Assembly facility, which builds the Chevrolet Sonic and Buick Verano small cars, will be idled from March 9 to 13. The plant was also down last week and was previously scheduled a downtime from April 6 to 10. Meanwhile, the “Flex” line will be idled from April 13 to 17. The said assembly line builds the Chevrolet Camaro sports car, the Chevrolet Impala large sedan, as well as the Buick Regal and Cadillac XTS luxury sedans.

The output reductions come after demand for cars significantly decline. With gasoline prices at their lowest, most buyers often favor pickup trucks, crossovers and SUVs. Low car sales are also influenced by the models themselves. GM is specifically trimming output of nameplates due for a redesign in the near future. Because the models are older, these are not as appealing to consumers.

There is a need for GM to slash production as inventories continue to mount. According to the Automotive News Data Center, GM had a 216-day supply of Sonics on February 1. This is the highest inventory recorded since the car was launched in August 2011. On the same day, there was a 213-day supply of Regal units and a 131-day supply of Camaro sports cars.

Inventory levels of the other models were high, but not too high compared to past months. On February 1, the Cadillac XTS had a 109-day supply, the Verano had a 92-day supply while the Impala had a 65-day supply.

LMC Automotive pointed out that 2015 began with GM having a 127-day supply of the Sonic and an 84-day supply of the Verano.

GM has yet to comment on the reported production trims. Company spokesman Bill Grotz only said that the automaker builds to market demand.

With demand for cars on a descent, GM is expected to schedule more production cuts. This was confirmed by Ron Svajlenko, head of Unifor Local 222, which represents GM’s Ontario plant. The Oshawa Assembly has approximately 3,700 hourly workers and salaried employees. An estimated 2,700 workers are assigned to the “Flex” line, which operates on three shifts.

Meanwhile, the Orion Assembly plant employs 1,750 hourly workers. GM announced last November that it would let go of 160 employees through the end of the year.

Photo credit: © General Motors CC BY-NC

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