GM pickup launch slowed by axle supplier

"We've been slowed down for several weeks because we can't get enough axles," said Rich LeTourneau, shop chairman for UAW Local 2209, which represents most of the plant's 3,800 workers.

The axle bottleneck is the result of a capacity crunch rather than a quality problem, said three other people familiar with the situation, who requested anonymity.

Complex launch

The shortage highlights the challenges GM faces in executing three high-volume, complex launches in the span of about nine months: its redesigned light- and heavy- duty pickups, along with its next generation of SUVs, which share the same platform, code-named K2XX.

GM has been working closely with suppliers for years to ensure adequate quality and volume of parts for the most important launch since its 2009 bankruptcy. It even took the unusual step of hiring retired GM engineers to work with suppliers on the launch.

GM spokesman Jim Cain confirmed that production at Fort Wayne has been curtailed but declined to specify the components or identify suppliers. He said any lost production will be made up in coming weeks and added that there will be "no net loss in production on the pickups."

Cain added: "Parts were allocated in order to minimize the impact of the shortage on our operations to allow for the fastest possible recovery."

American Axle spokesman Chris Son said: "We are meeting GM's production requirements" but declined to elaborate.

Dealers waiting

The Fort Wayne plant has been building regular and double-cab models since late summer as part of the second phase of GM's critical pickup launch. Many dealers say they're waiting for more of those cab styles amid plentiful stocks of pricier crew cabs, which were the first of GM's redesigned '14 pickups to roll out, in June.

GM sales executives said early this month that the company is filling the pipeline of regular and double cabs, which they expect to account for about 40 percent of pickup volume.

"We are still getting our mix in line," Chevrolet sales chief Don Johnson said on Oct. 1. "We have got good inventory in crew cabs, but we are still building double-cab and regular-cab inventory."

Crew cabs are assembled at GM's plant in Silao, which is a 20-minute drive from the American Axle factory and hasn't been affected by the shortage. A third GM pickup plant, in Flint, Mich., hasn't begun producing redesigned '14 models for sale.

The Fort Wayne plant ran at full capacity for a few weeks before production was pulled back in late September because of the axle issue. Shifts on several days have been cut to four hours, LeTourneau said.

More axles

GM is scrambling to get enough axles to feed both the '14 pickups at Fort Wayne and its SUV plant in Arlington, Texas, each of which is supplied by American Axle's Silao plant, the sources said.

Normally the pickups and SUVs would get the same axles because they share a platform. But for now, American Axle's Silao plant is supplying certain axles for the '14 pickups and older versions for the SUVs, which will be phased out soon before GM moves those vehicles to the new truck platform. The overlap has slowed production at the axle plant, the sources said.

Another factor: Demand for pickup models with GM's 5.3-liter V-8 engine, rather than its 4.3-liter V-6, has been greater than GM expected, crimping the supply of the beefier axles used on those models.

Faced with a finite supply of axles for the pickups and SUVs, GM has put a high priority on the SUV program as it builds out its final stocks of the Chevy Tahoe and Suburban, GMC Yukon and Cadillac Escalade, the sources said. The company wants enough units to last through a production lull as the Arlington plant switches to the redesigned models in December.

"GM is moving to take care of Arlington's current needs, which are greater than expected, so there has been some short-term sacrifice" of pickup production at Fort Wayne, one of the sources said.

GM already pushed back the SUV launch by roughly three months to give GM more breathing room to launch the pickups, GM North America President Mark Reuss confirmed last spring.

"We recadenced all of this so that we're successful," Reuss said in May. "It's load. How much can we really do, and do it really flawlessly?"