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GM Idling Truck, SUV Factories 10 Weeks to Retool for New Models

April 13, 2017
GM plans to idle its pickup plants as well as its factory that builds the Buick Enclave and Chevrolet Traverse models.

General Motors Co. (IW 500/3), drawing attention with elevated inventory levels in the U.S., said it’s been building supply because several plants will spend a combined 10 weeks retooling for production of new models.

GM ended March with almost 100 days’ supply of vehicles, more than the roughly 70 days the company typically likes to carry. The rising stockpile is partly a byproduct of slowing passenger-car sales, but also a strategic move to prepare for the idling of sport utility vehicle and pickup factories later this year, according to Jim Cain, a company spokesman.

Investors have been focusing on automakers’ swelling inventories as U.S. vehicle demand has slumped in each of the first three months of the year. A sales executive at Toyota Motor Corp. said Tuesday that industrywide sales have peaked and may decline to as low as 17 million vehicles in 2017, from last year’s record of about 17.5 million.

GM plans to idle its pickup plants as well as its factory that builds the Buick Enclave and Chevrolet Traverse models, Cain said. The two SUVs have been redesigned, so GM has to add new equipment to the assembly lines.

Chief Financial Officer Chuck Stevens said GM would build inventory ahead of introducing new versions of several SUVs this year during the Detroit-based company’s fourth-quarter earnings call in February.

By David Welch

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Bloomberg

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