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GM eliminates third shift at CUV plant

10/23/2007, 8:38 AM

By Drew Johnson

General Motors has announced that it will eliminate the third shift at an assembly plant near Lansing, Michigan — laying off approximately 1,000 workers. The plant — which makes the Buick Enclave, GMC Acadia and Saturn Outlook — was operating on three shifts to meet initial demand for the crossovers.

“We said at the beginning this would be a temporary measure,” said Tom Wickham, a company spokesperson.

GM insists the shift elimination is to control inventory in order to prevent heavy discounting of excess vehicles, not because of decreased demand. “Demand is not slackening,” Wickham said.

According to The Detroit News, the lay off is expected to impact 510 low-seniority full-time workers and 497 temporary employees.

GM failed to mention if it has any plans to reinstate the third shift sometime in the future.

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10/23, 8:39 AM

posted by:

sharpie

As nice as the Enclave is, don’t flood the market with overstock. Good move.

10/23, 9:06 AM

posted by:

autonut

Overflow the market? That brilliant analysis. Make it as rare as Bentley!
GM is adhering to consumer demand. If they can’t sell them, they will not build them. Better then schmucks at Chrysler building Pacificas till they need to be tossed into Atlantic to reduce glut. Actually I think it is disturbing for GM. Those vehicles for US market only, if demand is not there it can become a huge loss in a 3-5 years, whenever breaking point on investment into the product line was predicted.

10/23, 9:36 AM

posted by:

CTS DRIVER

wow gm is thinking the right way, interesting, i just checkes outside and didnt notice any flying pigs, what gives. :)

10/23, 9:42 AM

posted by:

Brendino

You think these cars would fly anywhere outside of the US? it’d be nice to see them not solely dependent on the US market.

10/23, 10:00 AM

posted by:

autonut

Those vehicles can house average village in South Asia. They are too big for Europe and with $7/gallon of gas (or diesel) they are not the best choice either. Gas in Africa is expensive as well. That leaves Australia: with 20 million inhabitants this is hardly a market, but in Canada they may find homes. Keep in mind that vehicle sold for 40K in US cost as much as 70K in Europe and even more in other parts of the world. You do the math: where they can be sold and what payoff may be?

10/23, 10:02 AM

posted by:

Commodore

autonutt – the Enclave is not US-market only. It is also exported to China.

And I think that this is mostly because of the Outlook and Acadia which have been slightly slower sellers. The Enclave demand is still there so I don’t think it’s because of it, it’s simply because the Lambda’s are past their introduction now, so dealers have enough of them

10/23, 10:23 AM

posted by:

autonut

OK, but you don’t invest in the platform to create initial demand (well I hope GM doesn’t). There is has to be marketing story for continuity. Given the price of this vehicle, how many do you think will fly in China? And only Buick models – this is prestige brand for Chinese.
China is a communist state, there are couple of problems with selling there: taking money out is huge one and there is a strict limit on how many cars can be imported vs. manufactured locally. But you are right there are plans to sell them in China.

10/23, 10:56 AM

posted by:

LamborghiniZ

Of course they did! Toyota, the scurge of the earth (right everyone? right?!), employing thousands of blue collar workers. GM, the domestic good ol’ boy, laying off thousands, seemingly endlessly. Ahh yes, the irony.

10/23, 11:19 AM

posted by:

TomF

I can’t remember a time in recent history when an American carmaker managed a hot product by controlling production to maintain demand instead of flooding the market until nobody cared about the car anymore and they had to resort to 1.9% financing.

In another category, look at the New Beetle, the PT Cruiser and the Mini Cooper. Only Mini did the smart thing and controlled sales. The other two vehicles, which could have remained “cachet” cars, were murdered by overproduction.

Self-control is especially crucial in the case of the Lambdas because I do not see much of a market for them outside North America. Certainly not in Europe where the thing will block whole streets and it’ll cost US$130 to fill the fuel tank. They have to maintain the cars’ desirability on these shores, or it dies. If we see 1.9% on the Enclave two years from now it’ll be a massive failure of strategy for GM.

10/23, 11:39 AM

posted by:

CTS DRIVER

scurge of the earth, lmao @ lamboz.

10/23, 12:38 PM

posted by:

tripleonefive

God GM sucks
I love the dont flood the mrket with Enclaves excuse. The will sit on dealer lots and get discounted. GM will take too long to redesign it and then it will fade away just like the Rendevous and Ranier
GM needs to put more money into Saab
check this out
http://bp0.blogger.com/_XEEIzU0UA1M/Rx4XNcFTudI/AAAAAAAADfs/-uHubPREqFg/s1600-h/01.jpg

10/23, 1:17 PM

posted by:

Get Real

The crossover segment was going to save GM…..guess not.

Put MORE money into Saab…?????

Do you work for Toyota ?

10/23, 1:19 PM

posted by:

Commodore

Wow 1115, did you find the 9-4x? Is that what that is?

And no, GM won’t do that anymore. And demand for the Enclave is high….why do you think they are lowering production? It IS because they DON’T want to flood the market and have to give huge discounts

10/23, 2:40 PM

posted by:

Impulsive

‘Lambo’, you stupid monkey … it’s ’scourge’, not scurge … continued worthlessness.

10/23, 2:52 PM

posted by:

autonut

TomF, minor point: Mini is BMW, a company with cache, WV & Chrysler don’t have and will not have cache. I doubt that BMW is controlling demand on Minis. You can buy what you want and there is no waiting list. I live in NYC market and it should be the hottest market for this car. There are plenty of them to go around. And BMW is trying to find way to increase Mini production, it’s not that easy.

10/23, 2:58 PM

posted by:

autonut

About Enclave: I think GM is controlling production not trying to hype the market. Cutting production shift is controlling inventory, flooding media with commercials is to achieve latter. I haven’t seen increase in commercials either (it is anecdotal observation of course), but my gut tells me that those CUVs will not be corporate saviors: they are expensive and still rather thirsty. Haven’t seen as many of them as say Altimas or Accords or Camrys. I even guess to say that there are more Odysseys are sold and it is 2-3 year old model.

10/23, 3:22 PM

posted by:

LSC

Damn! I was hoping to pick one up after they start discounting them :-( I’m actually serious.

10/23, 4:32 PM

posted by:

autonut

LSC go to nearest Saturn dealer: they have the biggest inventory. I read that this CUV is too rich for the blood of average Saturn customer (they are not ready to drop 30+ on a vehicle).

10/23, 4:35 PM

posted by:

Jazz

Finally, they are controlling inventory right.
Look at Honda. They build with a Just-in-Time strategy on their Suv/truck. That is where any plant operator wants to be. For the longest time GM had to overproduce to keep UAW happy. Now that they have the new contract in place they have created room for themselves to idle some plants and cut production at other plants. I’m liking GM as a company more and more these days. Not a fan of the products yet but it s a start.

10/23, 8:48 PM

posted by:

frylock350

LSC go to nearest Saturn dealer: they have the biggest inventory. I read that this CUV is too rich for the blood of average Saturn customer (they are not ready to drop 30+ on a vehicle).
Comment by autonut

You are right about that. Saturn customers aren’t comfortable with a vehicle that large and pricey with a Saturn badge on it. Doesn’t fit with the old Saturn image.

10/23, 11:21 PM

posted by:

sharpie

I think the VUE is cannabilizing some of the sales of the bigger brother. It is not in the same class, but since when did large Saturn anything (car or truck) sell well?

10/24, 3:38 PM

posted by:

jackjimturkey

sharpie, LSC: I want the market flooded enough so I don’t have to pay MSRP. Couldn’t find one earlier this month.

TomF: great post at 11:19a on the 23rd. I’d include the HHR, too.

Jazz: JIT is the only way to operate any manufacturing business.

 
 
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