DETROIT — Guess who is adding shifts and running on overtime to build more cars. General Motors. þþJust a month after emerging from bankruptcy reorganization, G.M. is running low on cars.þþThe company said Tuesday it would add shifts and run some plants on overtime so it can increase production by 60,000 vehicles by year’s end in response to the demand created largely by the “cash for clunkers” program.þþThe move mirrors one made last week by Ford, which also plans to increase production to meet demand that was heightened by the clunkers program. þþG.M. said it would bring 1,350 idled union workers in Ontario and Ohio back to work and provide overtime shifts for about 10,000 workers. G.M. plans to increase output at nearly all of its plants in the United States.þþ“Our dealers are clamoring for more vehicles almost in every segment,” Mark LaNeve, G.M.’s vice president for United States sales, said in a conference call Tuesday afternoon. “We want to run lean; we’re just way too lean right now. We’re going to miss sales unless we put some additional production in.”þþBy the end of August, the company expects to have less than 30 days’ supply of the vehicles that have been most popular among cash for clunkers participants, like the Chevrolet Cobalt and Malibu sedans. þþThat is about half the industry standard. G.M. drastically cut production in the last year as sales plummeted, so even after the planned increase, fourth-quarter production will be about 22 percent less than in the final months of 2008. The company plans to build 535,000 vehicles in the third quarter, 42 percent fewer than it did in the same period a year ago.þþThe recent increase in demand has caused G.M.’s inventory of unsold vehicles to fall to about 360,000 vehicles, the lowest since the company began keeping track of that figure. Several years ago, G.M.’s inventory typically consisted of well above 1 million vehicles.þþMr. LaNeve said G.M. now expected to surpass its internal sales forecast for August by at least 50,000 vehicles. “It will be far and away our best retail month of the year,” he said, though G.M. might still sell fewer vehicles in the month than it did last August, which was a good month for vehicle sales just before the market collapsed in September.þþHe said the added production would be needed even if sales decline as interest in the clunkers program wanes. The government program, which started in late July, gives a credit of up to $4,500 to consumers turning in an older, inefficient vehicle and buying a new vehicle with a higher fuel-economy rating. þþOn Monday, the Transportation Department said 390,283 vehicles had been traded in under the program and that $1.63 billion of its $3 billion in financing had been used.þþEdmunds.com, a Web site that gives car-buying information to consumers, on Tuesday said interest in the clunkers program was falling fast. It said vehicle purchase intent, which tracks the number of people likely to buy a car in the next 90 days, had dropped 31 percent since late July.þþ“Now that there is plenty of money in the program and the most eager shoppers have already participated, the sense of urgency is gone, and the pace of intent decline is accelerating,” Jeremy Anwyl, the chief executive of Edmunds, said. ÿInventories are getting lean and prices are climbing, giving consumers reasons to sit back.ÿþþG.M. plans to bring about 800 workers back to its assembly plant in Lordstown, Ohio, which builds the Cobalt and the soon-to-be discontinued Pontiac G5, and 550 workers back to a plant in Ingersoll, Ontario, that makes the new Chevrolet Equinox and G.M.C. Terrain crossover sport utility vehicles. þþLordstown has been on a roller coaster since last summer; G.M. added a third shift when demand for small cars surged in response to high gas prices, then eliminated both the second and third shifts when the market for new vehicles slumped.þþOvertime work will be scheduled at a pickup-truck plant in Fort Wayne, Ind.; crossover plants near Lansing, Mich., and Spring Hill, Tenn.; and sedan plants in Fairfax, Kan., and Lake Orion, Mich. The extra work means the Lake Orion plant, which was scheduled to close for a lengthy retooling project in mid-September, will stay open until late November instead.þþOvertime work used to be extremely common at auto plants, greatly increasing workers’ pay, but the carmakers have all but eliminated it in recent years as their sales plunged. þþG.M. has been running a plant in Oshawa, Ontario, on overtime this summer to meet demand for its new Camaro sports car, which still has a waiting list of about 10,000 people.þþG.M. said it might need to schedule additional production increases in the fourth quarter.þþ“This is a very, very broad surge in demand for us across our entire portfolio,” Tim Lee, G.M.’s group vice president for global manufacturing and labor, said.þþ
Source: NY Times
