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GM to Boost Output Due to Clunkers Incentives

AP
Tuesday, 18 Aug 2009 | 11:49 AM ET

Higher sales from the government's Cash for Clunkers program have prompted General Motors to boost production at several of its factories, according to company and union officials.

AP

The increases include an extra day of work at the Lordstown, Ohio, assembly plant and increased hours at a factory in Orion Township, Mich., said the union officials, who asked not to be identified because the announcement, expected Tuesday afternoon, had not been made.

The Lordstown plant, which makes the Chevrolet Cobalt and Pontiac G5 small cars, is now running at one shift for 10 hours per day from Monday through Thursday, but the company will add the next two Fridays to the schedule, one union official said. Plant spokesman Tom Mock confirmed the increase.

It was unclear what would be added at the Orion plant, which makes the Chevrolet Malibu and Pontiac G6 midsize sedans.

The Malibu and Cobalt have been popular with people trading in older less-efficient models under the clunkers program, which offers up to $4,500 to people to scrap vehicles with gas mileage of 18 mpg or less.

At the end of July, GM had 70 days worth of Cobalts on dealer lots, while it had 55 days worth of Malibus, according to Ward's AutoInfoBank. A 60-day supply is ideal to maintain a good selection for buyers but not have too many cars.

But since the clunkers program began in late July, dealers have reported spot shortages of both vehicles.

At Randy Wise Buick-Pontiac-Chevrolet in Milan, Mich., southwest of Detroit, there were 22 Cobalts and 26 Mailbus on the lot before the clunkers rebates started, said Mark Jarrait, general sales manager. But now the dealership is down to two Cobalts and four Malibus, and he has ordered more, Jarrait said.

"All of the sudden they disappeared," he said. "The Cobalt has been extremely hot. The Malibu has been extremely hot."

The Cobalt, GM's highest-mileage car at up to 37 mpg on the highway, once was among the top 10 vehicles on the "cash for clunkers" purchase list. But dealers say shortages have bumped it from the top 10 list.

As of last week, the Toyota Corolla small car was the top new vehicle purchased by people trading in clunkers, followed by the Honda Civic and Ford Focus compacts. Toyota's midsize Camry was fourth, while its gas-electric hybrid Prius was fifth, according to the government.

Ford, Honda ,Toyota,Hyundai and Chrysler all have announced production increases due to the clunkers program.

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