GM Plants To Start Moving Again
July 10, 2009
By Bill Visnic
Assembly plants for the new General Motors Co. will start to fire up again next week after the newly reconstituted GM left Chapter 11 bankruptcy today and the company completes its traditional two-week shutdown, said president and CEO Fritz Henderson.
The new GM, after leaving many of its plants and other operations with the cast-off assets of the "old" company, should begin to "run our plants on a stable basis going into the second half of the year," Henderson said in a press conference today to announce GM's emergence from bankruptcy and to detail other organizational changes for the new company.
How the company will be organized is important, but the immediate concern is to sell new vehicles in a U.S. auto market that stubbornly refuses to break a Seasonally Adjusted Annual Rate of sales in excess of 10 million units -- the industry sales volume GM continues to say it needs to at least break even selling vehicles in the U.S.
In the past months, GM has run many of its assembly plants and affiliated operations at a heavily reduced capacity as the company sought to become a much smaller operation by shedding four brands and aligning its production with current market demand. Henderson said GM was simultaneously working to reduce bloated inventories brought about by the drastic reduction in U.S. vehicle sales that began in the second half of last year.
Henderson said GM is approaching its inventory target of about a half-million units and so feels better about resuming more-normalized production schedules as the second half begins.
Industry analysts remain guarded about what the second half might bring in terms of auto sales, however. Most agree the recently adopted "Cash for Clunkers" legislation will tempt a significant number of new-vehicle buyers into showrooms -- analysts at Edmunds.com, parent of AutoObserver, forecast the program may result in 250,000 extra sales -- but the U.S. economy continues to sputter and most industry watchers are predicting second-half auto sales to remain tepid and full-year sales to barely exceed the 10-million-unit mark.
Considering this, Henderson said that although GM is bringing its plants back to more standard production levels, he will not hazard a forecast as to when GM might choose to hike any production schedules.
Posted by Bill Visnic at 8:03 AM under Business , Companies , GM , News | Comments (0) | digg this | Seed Newsvine
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