indieaz
06-23-2008, 04:48 PM
http://online.wsj.com/article/SB121424094257797029.html?mod=googlenews_wsj
DETROIT -- Expanding its efforts to address a steep decline in sales of pickup trucks and sport-utility vehicles, General Motors Corp. plans to extend the summer shutdowns at six plants and to offer more sales incentives to clear its bloated inventory of large vehicles.
The company will also raise prices on its 2009 models by 3.5% on average, equal to about $1,000 per vehicle, to help cover increased commodity costs, additional vehicle content and fuel-economy technology.
GM is continuing to revamp its entire product portfolio and production schedule amid the sharp decline in the sale of pickups and sport-utility vehicles as consumers skip the gas-gulping large vehicles in favor of smaller cars at a time of $4-a-gallon gasoline. GM shares, which hit a 33-year low on Monday, were down 6% at $13 in recent trading.
GM's production changes come three days after Ford Motor Co. announced plans to further slash production of large vehicles and delay the release of its redesigned F-150 pickup truck by two months. Chrysler, the other major U.S.-based auto maker, has also said it will scale back production of large vehicles.
[image]
Getty Images
A GM worker added sales data to an SUV as it rolled down the assembly line at a Wisconsin plant. GM is offering new sales incentives on large vehicles to reduce bloated inventory.
The Big Three Detroit auto makers have long relied on trucks and SUVs to sustain themselves. The recent dramatic decline in sales of large vehicles has heightened concerns that U.S. auto makers could face increased financial pressure as they burn through cash at a quicker rate.
GM said Monday that it will close six plants for one week longer than the already announced standard two-week shutdown. The auto maker will also schedule additional weeks for shutdowns at several of those plants. In one case, the Janesville, Wis., truck plant, as many as 10 additional weeks will be scheduled, GM said.
At the same time, GM said that it will increase output of cars and crossovers -- which have some of the same features as SUVs but are built on car platforms -- by adding overtime work at three of its North American plants.
"We are and plan to continue to respond to the market shift for trucks and SUVs," GM spokesman Chris Lee said.
Earlier this month, GM announced that it would permanently close four North American plants that build trucks or SUVs, while redoubling efforts to introduce more fuel-efficient vehicles.
GM's U.S. sales of trucks and SUVs fell 37% in May, the biggest decline in the segment among the major auto makers. U.S. auto industry sales appear to be even weaker in June, with large vehicles suffering the brunt of the decline.
In addition to the production cuts, GM has been forced to increase the amount of incentives it offers.
On Monday, the company announced a sale on most of its vehicles starting Tuesday and running through June 30. Consumers can get 0% financing for up to 72 months or up to $7,000 in cash on such vehicles as the Chevy Silverado. The program is similar to other annual sales events such as the Red Tag year-end offer.
DETROIT -- Expanding its efforts to address a steep decline in sales of pickup trucks and sport-utility vehicles, General Motors Corp. plans to extend the summer shutdowns at six plants and to offer more sales incentives to clear its bloated inventory of large vehicles.
The company will also raise prices on its 2009 models by 3.5% on average, equal to about $1,000 per vehicle, to help cover increased commodity costs, additional vehicle content and fuel-economy technology.
GM is continuing to revamp its entire product portfolio and production schedule amid the sharp decline in the sale of pickups and sport-utility vehicles as consumers skip the gas-gulping large vehicles in favor of smaller cars at a time of $4-a-gallon gasoline. GM shares, which hit a 33-year low on Monday, were down 6% at $13 in recent trading.
GM's production changes come three days after Ford Motor Co. announced plans to further slash production of large vehicles and delay the release of its redesigned F-150 pickup truck by two months. Chrysler, the other major U.S.-based auto maker, has also said it will scale back production of large vehicles.
[image]
Getty Images
A GM worker added sales data to an SUV as it rolled down the assembly line at a Wisconsin plant. GM is offering new sales incentives on large vehicles to reduce bloated inventory.
The Big Three Detroit auto makers have long relied on trucks and SUVs to sustain themselves. The recent dramatic decline in sales of large vehicles has heightened concerns that U.S. auto makers could face increased financial pressure as they burn through cash at a quicker rate.
GM said Monday that it will close six plants for one week longer than the already announced standard two-week shutdown. The auto maker will also schedule additional weeks for shutdowns at several of those plants. In one case, the Janesville, Wis., truck plant, as many as 10 additional weeks will be scheduled, GM said.
At the same time, GM said that it will increase output of cars and crossovers -- which have some of the same features as SUVs but are built on car platforms -- by adding overtime work at three of its North American plants.
"We are and plan to continue to respond to the market shift for trucks and SUVs," GM spokesman Chris Lee said.
Earlier this month, GM announced that it would permanently close four North American plants that build trucks or SUVs, while redoubling efforts to introduce more fuel-efficient vehicles.
GM's U.S. sales of trucks and SUVs fell 37% in May, the biggest decline in the segment among the major auto makers. U.S. auto industry sales appear to be even weaker in June, with large vehicles suffering the brunt of the decline.
In addition to the production cuts, GM has been forced to increase the amount of incentives it offers.
On Monday, the company announced a sale on most of its vehicles starting Tuesday and running through June 30. Consumers can get 0% financing for up to 72 months or up to $7,000 in cash on such vehicles as the Chevy Silverado. The program is similar to other annual sales events such as the Red Tag year-end offer.