GM Makes More Cuts to Pickup, SUV Production
General Motors said it will cut production by another 117,000 vehicles, citing continued weak in consumer demand for pickup trucks and sport utility vehicles.
GM spokesman Tony Sapienza said the Detroit-based automaker will achieve the cuts by eliminating one shift each at its Moraine, Ohio, and Shreveport, La., plants. Most of the cuts will affect production of trucks and sport utility vehicles.
The Moraine plant makes the Chevrolet TrailBlazer, GMC Envoy, Buick Ranier, Isuzu Ascender, Saab 9-7x midsize SUVs, while the Shreveport plant currently produces the GMC Canyon, Chevrolet Colorado and Hummer H3.
The cuts bring GM's total production cuts to just under the 300,000 units company officials had hoped to cut this year, Sapienza said.
GM also is looking at the possibility of idling production at other truck and SUV plants later this year to further align its offerings with consumer demand, he said.
Record-high gas prices and a weak overall economy have led to a steep drop in U.S. sales of trucks and SUVs this year, as consumers have opted for small, more fuel-efficient passenger cars or put off buying new vehicles all together.
GM's U.S. sales were down about 16 percent for the first half of this year, largely as a result of a plunge in truck sales, and it's not the only automaker facing lower demand.
Japanese rival Toyota Motor, which outsold GM by 277,532 vehicles worldwide in the first six months of this year, cut its global sales forecast earlier Monday by 350,000 vehicles to 9.5 million, blaming sluggish North American sales.
Toyota also is shifting production from SUVs and trucks to smaller models.
It said earlier this month that it plans to shut down truck and SUV production at its U.S. plants for three months starting in August, and it will start building the Prius hybrid in the U.S. for the first time in 2010.
GM shares fell by more than 5 percent Monday.
GM Cuts Warranty Terms on Saab Vehicles
GM cut its warranty terms on Saabs sold in the United States to cut costs, but will continue to provide free scheduled maintenance to compete with other premium brands, a spokeswoman said.
GM told dealers Friday it would cut its Saab warranty effective immediately to four years or 50,000 miles from the extended warranty of seven-years or 100,000 miles offered on other vehicles, spokeswoman Joanne Krell said.
The carmaker provides free scheduled maintenance for three years, or 36,000 miles on Saab vehicles in addition to the warranty, setting it apart from other GM vehicles, Krell said.
The combination of a four-year warranty and the scheduled maintenance "makes sense to the import premium buyer, which is where Saab fits in the automotive landscape," Krell said.
The decision to cut the warranty terms applied only to the Saab brand and does not apply to GM's other premier brands Cadillac and Hummer, Krell said. She did not have a dollar figure on the cost savings.
GM earlier in July said it planned to cut $10 billion of costs and make asset sales of up to $4 billion to shore up its liquidity due to the downturn in U.S. auto industry sales that has landed most heavily on large trucks and SUVs.
Chief Executive Rick Wagoner said on Friday the automaker remained committed to Saab, which analysts have long suggested could be divested to allow GM to narrow its brand focus.
The warranty change has absolutely no connection to any discussion about changes in brand status with GM, Krell said.
Jerry York, who served briefly on GM's board two years ago as a representative for investor Kirk Kerkorian, had suggested that GM divest Saab and Hummer among other strategies that were rejected by GM executives at the time.