General Motors is pumping $400 million into its Arlington, Texas, assembly plant to boost the plant's production of full-sized sport-utilities and pickups by 50 percent.
That is the good news. The bad news: Arlington must interrupt production to accommodate the changeover to GM's new models. Plus, the change-over comes as GM tries to keep pace with Ford Motor Co.'s sales of high-profit light trucks.
For example, Ford Division sold 213,910 F-series pickups in the first three months of 1999. That is up 20.7 percent from the same period of 1998. GM sold 190,619 full-sized pickups in the first quarter of 1999, up 0.4 percent.
Arlington produces the previous generation of Chevrolet's and GMC's full-sized pickups. It also builds the current generation Chevrolet Tahoe, GMC Yukon and Cadillac Escalade.
The plant is expected to build a mix of the next-generation versions of the pickups and sport-utilities.
GM declined to indicate Arlington's annual production capacity. An Automotive News estimate puts annual capacity at 125,000 trucks. If so, the renovations would boost capacity to 185,000 units.
The automaker is mum about its schedule for building a new body shop and renovating its paint shop in Arlington. The company says only that it will shut down Arlington sometime in the first half of 2000 and resume output in the second half.
However, one analyst thinks GM can avoid a lengthy shutdown.
'I doubt there will be significant interruption of production,' said analyst Mike Robinet of CMS Corp., a consulting firm in Okemos, Mich. 'It could range from one to two months, but it shouldn't be much more than that.'
Robinet noted that GM could minimize production losses by building a new body shop next to the old one. That would allow the plant to continue pumping out the old trucks while retooling for the new ones.
Company spokesman Tom Beaman declined to indicate whether GM would build a new body shop alongside the old one. But he said the plant would be retooled as quickly as possible.
GM expects to introduce the 2000 models of its full-sized sport-utilities late this year. The automaker's plant in Janesville, Wis., will produce the initial run of new models. Within the first half of next year, Arlington will start retooling for the vehicles.
The importance of GM's retooling strategy is highlighted by Arlington's previous shutdown. In December 1996, Arlington shifted production from cars to trucks. The plant began pilot production in March 1997 and resumed regular production in June 1997.
If Arlington undergoes a similar shutdown next year, it might lose about 60,000 trucks. A shorter two-month shutdown might result in the loss of about 20,000 trucks, based on an output rate of 32 trucks an hour.
As GM ponders its model change-over, Ford is busy squeezing every last truck out of its assembly plants.
Ford maintains three-crew operations at the Michigan Truck plant in Wayne, Mich., and its Kentucky Truck plant in Louisville. The Michigan Truck plant assembles the Ford Expedition and the Lincoln Navigator, while Kentucky Truck produces super-duty Ford F-series pickups.
Staff Reporter Mary Connelly contributed to this report