GM idles Texas plant
In a further sign of weakening demand for large, gas-guzzling SUVs, GM has announced it is idling its 54-year-old Arlington, Texas plant for three weeks. This comes only two weeks after a GM spokeswoman said this about Arlington: "We are currently running at full production and foresee continuing to run at full production indefinitely..." Workers at the plant had been producing 900-1000 Chevrolet Tahoes and Suburbans, GMC Yukons, and Cadillac Escalades a day. Ten months ago, Autoblog reported large SUVs were holding their own. Now, these models are seeing reduced sales compared with last year as consumers react to the worsening economy and increasing gasoline prices. "Sales of the Escalade fell 25.7 percent in March from year-ago levels, and the others fell more than 30 percent," the Associated Press reports. New orders from dealers have slowed as a result.
[Source: Dallas Morning News and Dallas Business Journal]
Reader Comments (Page 1 of 1)
BoomBoom 2:58PM (4/15/2008)
Good thing they've got a hybrid Tahoe coming out. The market for large SUVs is clearly robust...
Reply
MarkR 3:29PM (4/15/2008)
This announcement is almost a week old, At least for us in Texas.
Reply
jm99 7:32PM (4/15/2008)
Actually, according to recent GM press releases, current overall production of the GMT-900s will be going *up* when Arlington idles, because two other plants up north (Oshawa and another whose name escapes me) will be coming back on line as it goes down. Also, sorry to disappoint, but it really has less to do with current sales rates than with limited parts availability because of the ongoing American Axle strike.
Arlington has been the only one of the three factories running in recent weeks due to insufficient numbers of specific parts available from American Axle (they apparently could only supply enough for one factory). AA has recently freed up some supply from a facility in Mexico, getting the supply level up enough to be able to support two factories simultaneously. I figure GM is trying to keep the local unions as happy as possible given the circumstances, and is in essence trying to rotate the furloughs a bit by now idling Arlington while firing back up the other two.
Now is all of this happening against the backdrop of lower sales for the big SUVs? Of course. The strike has actually helped GM reduce inventories in the short term, because they had over-estimated demand for the GMT-900s and had let them pile up a bit before the reduced production was forced on them. But the fact remains, the near-term production shuffling still has more to do with the strike than anything.
Reply