Walkout threatens GM car production next week
Ryan Beene
Automotive News
March 27, 2008 - 4:00 pm ET
DETROIT -- The UAW strike at American Axle & Manufacturing Holdings Inc. that has halted light-truck production at General Motors soon may push the automaker to close its first car assembly plants. GM could stop building the Chevrolet Cobalt and Pontiac G5 in Lordstown, Ohio, by April 4 because of a shortage of a brake part made by American Axle, according to an Associated Press report. GM's Detroit-Hamtramck assembly plant, which makes the Buick Lucerne and Cadillac DTS sedans, may also face a shutdown, the AP said. GM would not comment on any potential shutdowns at either plant. "We are not going to speculate on what may or may not happen in the future," GM spokesman Dan Flores told Automotive News in an e-mail message. GM had a 53 days supply of Chevrolet Cobalts and 110 days supply of Pontiac G5 small cars as of March 1. Buick Lucerne inventories were at 100 days supply, and Cadillac DTS inventories were at 59 days supply. Erich Merkle, an automotive analyst with IRN Inc. in Grand Rapids, Mich., told Automotive News that a shutdown of the plants would be unlikely to force GM's hand in the matter. "It's a little bit of an 'ouch,' but it's certainly something that's survivable," he said. "GM could still probably afford to stand on the sidelines a little while longer." He said supplies of the affected vehicles were largely in good shape, excluding the Cobalt, and that the big concern for GM is still its pickup trucks and SUVs. Merkle says GM makes much higher profits on the sale of trucks and SUVs, but there are still many sitting on dealer lots. GM truck inventories were equivalent to 106 days supply as of March 1. The 3,650-worker strike at American Axle, now in its fifth week, has forced seven GM light-truck assembly plants to close along with 22 parts operations in North America. Several suppliers also have slowed or idled plants that supply GM. No progress has been reported in talks between the UAW and American Axle, which is demanding deep cuts in pay and benefits to remain competitive with other driveline parts makers. GM depends on axles from the Detroit supplier for nearly all of its domestic light trucks. |
You can reach Ryan Beene at rbeene@crain.com.
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