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GM sales exec says company won't reopen factory

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Old Mar 20, 2010 | 06:30 PM
  #1  
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GM sales exec says company won't reopen factory

General Motors Co. will not reopen any factories, even though it has shortages of several new models, the company's top sales executive said Tuesday.

Vice President of Sales Susan Docherty told reporters on a conference call that GM needs to use its current factories to the maximum rather than taking the expensive step of reopening a closed plant.

Dealers have reported shortages of some new models, such as the Chevrolet Equinox and GMC Terrain midsize crossover vehicles, and some GM executives have been pushing to reopen a factory to boost production while the models are still hot.

"We don't need to do that," Docherty said. "We need to leverage our existing footprint."

At the Detroit auto show in January, GM North American President Mark Reuss raised the possibility of reopening a factory, and Vice Chairman Bob Lutz said that was how Chrysler gained market share in the 1990s when it had hot-selling products.

But Docherty said GM is just now seeing the benefits of adding third shifts at the factory in Ontario where the Terrain and Equinox are made, as well as the Fairfax plant at Kansas City, Kan., that makes the Chevrolet Malibu midsize sedan, she said.

GM also said it has low supplies of full-size sport utility vehicles, the Chevrolet Camaro muscle car and the Cadillac SRX crossover, a cross between an SUV and a station wagon.

By having tight supply, GM is getting better prices on its new models and making more money on them, Docherty added.

GM also said that in February, nearly 70 percent of GM's sales were cars and crossover vehicles, the highest percentage ever.

Last year, almost 60 percent of GM's sales were light trucks, according to Autodata Corp.
http://www.businessweek.com/ap/finan.../D9E6LF7O0.htm
Old Mar 20, 2010 | 06:51 PM
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I think that's a more than fair way to go. Keep the demand tight, overhead where it is, and if things continue to grow THEN consider re opening a plant. In the mean time just work overtime, make money, and pay the tax payers back
Old Mar 20, 2010 | 07:01 PM
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Do not reopen a plant until foresee significantly exceeding the current factory capacity. If it's that good of a vehicle most people will wait for it. A few lost sales cause they couldn't get the vehicle "right then" is worth it over the cost of an entire factory which would likely become excess capacity quick when fickle people change their buying habits.
Old Mar 20, 2010 | 07:01 PM
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Certainly sounds like a reasonable plan.
Old Mar 21, 2010 | 04:02 PM
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So, I can not hope for a 60 months 0% deal on 2010 or 2011 equinox?
Old Mar 21, 2010 | 06:14 PM
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Probably a 0% chance of that happening in the next 60 months
Old Mar 21, 2010 | 08:44 PM
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LT1 PWRD's Avatar
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GM Oshawa's car plant (Impala) is only operating at 45 Jph on a 2 shift operation. I'm sure Impala sales will remain soft until phased out so there's room for more products if GM wants to utilize all their factories at 100%.

I'm assuming there are more plants with that predicament trying to compete for these extra units....assuming the factory can accept the platform.
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