GM Extends Summer Breaks To Slash Bloated Inventories
April 23, 2009

By Michelle Krebs

DETROIT - General Motors plans to extend its usual summer shutdown from two weeks to as much as two months for many of its North American assembly plants as it attempts to reduce its record-high inventories of unsold vehicles.

GM's inventories, among the highest in the industry, are the highest since Edmunds.com began keeping records. Sales, and in turn revenues, have not picked up as GM had hoped as the slow sales months of the summer approach.

The move clearly is anticipation as well of a possible Chapter 11 filing that, GM has long argued, would shut off the sales tap even further as customers steered clear of a bankrupt company. 

Bloated Inventories

The U.S. auto industry in March had the highest inventories in recent memory. Edmunds.com, parent of AutoObserver.com, calculates inventories as days-to-turn; that is the number of days between a vehicle being delivered to a dealership and being driven off the lot by a paying customer. The industry stood at a record 98 days in March, according to Edmunds.com.

GM's days-to-turn surpassed the 100-day mark. At 111 days-to-turn, GM set a new record for the automaker, according to Edmunds.com's calculations. Only Chrysler, at 121 days, and Hyundai-Kia at 116 days, were higher.

Manufacturer      Days-To-Turn

GM                    111
Toyota                 77
Ford                    93
Chrysler             121
Honda                  85
Nissan                 96
Hyundai Group*  116
*Hyundai includes Kia
Source: Edmunds.com (March 2009)

Saab, Pontiac, Hummer Most Bloated

Not surprisingly, the highest inventories were at Saab, Pontiac and Hummer. Saab, with which GM is severing ties, had the highest at 197 days. Pontiac, which GM has said will be scaled back to a niche brand and recently has been rumored to be consideration for elimination altogether, had a 149 days-to-turn. Hummer, which is to be sold or eliminated any day now, at 155 days.

GM Brand     Days-To-Turn

Saab             197
Pontiac          149
Hummer         144
Cadillac          125
Buick             111
Chevrolet        106
GMC                93
Saturn              82
Source: Edmunds.com (March 2009)

Within those brands, some GM models have a days-to-turn of more than 200. Hummer H2 is at 282 days, Saab 9-3 is at 248 days and the Saab 9-5 at 210. In addition, the Cadillac XLR is at 204.

A number of models are at more than 100 days to turn: Buick LaCrosse and Lucerne; all Pontiacs but the Vibe are at well over 100 days; all Cadillacs but the Escalade Hybrid and Escalade ESV; half of Chevrolet's 22 models are at 100 days; three of GMC's 12 models are at more than 100 days.

On the positive side, GM's Delta Township plant near Lansing, Mich., that makes the Lambda-based crossover should experience a shorter break than other plants. The models the plant makes -- the Buick Enclave, GMC Acadia and Saturn Outlook -- remain in low supply with days-to-turn well under the industry average. Likewise for the Chevrolet Traverse, made at the Spring Hill, Tenn., plant.   

Photo by GM

Workers at GM's Shreveport, La., plant assemble Chevrolet and GMC small trucks and the Hummer H3. The plant is likely to be scheduled for an extended summer shutdown since inventories of the models it makes are sky high.

 

Posted by Michelle Krebs at 5:13 AM under Analysis , Featured , GM | Comments (2) | digg this | Seed Newsvine

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