Supplier Snags Slow GM’s Pickup Production
Despite the best efforts made by General Motors (NYSE:GM) to get its new, redesigned Chevrolet Silverado and GMC Sierra pickup trucks into the hands of clamoring customers, the production of the units has been kinked due to holdups and delays at the supplier which provides the axle units for the vehicles.
Recently, GM’s Fort Wayne, Indiana facility has reduced its production to 1,300 Silverados and Sierras a day, down from 1,500 units originally, putting a potential dent of 1,000-1,200 units lost every week; according to a union official at the plant, an American Axle & Manufacturing plant in Silao, Mexico, hasn’t been able to keep up its pace with the planned production rate.
“We’ve been slowed down for several weeks because we can’t get enough axles,” noted Rich LeTourneau, shop chairman for UAW Local 2209, which represents most of the plant’s 3,800 workers. Fortunately for all, the holdups at the axle plant are due to capacity bottlenecks — while it’s still a problem, it’s a preferable problem to have over, say, quality control issues. However, it does highlight a potential issue in GM’s own product strategy.
While virtually no one is arguing that GM’s big turnaround is a bad thing, the company’s coming releases of three high-profile models (the pickup trucks, and its next generation of SUVs) in the span of about nine months has put some serious strains on its supplier network despite GM’s oversight to ensure they could meet it’s lofty production goals.
Still, the company doesn’t appear too concerned about the parings. GM spokesman Jim Cain — who declined to give specific details – said that any lost production will be made up in coming weeks, and added that there will be “no net loss in production on the pickups.” As for American Axle spokesman Chris Son, when pressed on the matter, “we are meeting GM’s production requirements,” is all he revealed.
Although dealers are well stocked with the higher-end pricier models, it’s the regular cab and double cab models — the ones suffering delays — that are largely in demand. The two cab styles are expected to account for about 40 percent of GM’s pickup volume. However, it’s not just the cab issue that is holding things up — the demand for GM’s 5.3 liter V8 has been far more than anticipated, over the 4.3 liter V6, and putting further strain on the larger axles used in those models. ”We are still getting our mix in line,” Chevrolet sales chief Don Johnson said back on October 1. “We have got good inventory in crew cabs, but we are still building double-cab and regular-cab inventory.”
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