Strike puts GM truck production in limbo
[2008-12-23 17:07:39]
General Motors Corp is losing almost a third of its daily United States and Canadian vehicle production as parts shortages caused by an 11-day supplier strike shut down more of the auto maker's manufacturing network.
GM is building about 5,000 fewer vehicles each day than its 2007 average of 16,000.
The world's largest auto maker has closed seven truck factories so far and plans to trim output at another this week.
The closures, sparked by a strike at former subsidiary American Axle & Manufacturing Holdings Inc, will help reduce a stockpile of GM trucks that on February 1 was 24 days higher than the industry average.
At the beginning of last month, GM had 627,600 trucks in inventory, enough to supply US dealers for 113 days, according to the latest figures from trade publication Automotive News.
Analysts consider a 60-day supply normal.
"GM's truck supply can actually benefit by not producing as many," Efraim Levy, a Standard & Poor's equity analyst in New York, told Bloomberg News.
"Anything less than a month is a good thing, then it starts to get difficult."
The auto maker on Friday announced nine additional engine, transmission and metal-stamping factories would be closed from today in Michigan, Indiana, Ohio and New York states.
That would take the number of affected parts and auto-assembly factories at Detroit-based GM to 29.
GM spokesman Tom Wickham declined to comment. GM has said the plants would remain closed, or on reduced schedules, indefinitely until American Axle resolves the strike.
The walkout began February 26 over wage, health-care and pension issues.
American Axle held negotiations with United Auto Workers leadership on Friday, and the talks were expected to continue, spokeswoman Renee Rogers said.
GM, American Axle and other suppliers may be put on CreditWatch should the work stoppage "drag on more than another week or so," S&P debt analyst Robert Schulz said.
GM has halted production at large pickup and sport-utility vehicle plants in Ohio, Michigan, Indiana and Ontario.
GM doesn't provide its production totals for the Hummer H2 plant in Mishawaka, Indiana, or joint-venture plants in Ingersoll, Ontario, and Fremont, California.
GM fell 39 cents to US$21.96 in Friday's New York Stock Exchange composite trading, for a seventh consecutive decline and a 22-month low.
American Axle gained US$2.13, or 11 percent, to US$22.28, after a KeyBanc Capital Markets report said the supplier may save US$50,000 annually per worker following the strike.
GM's 8.375-percent note due July 2033 fell 0.94 cent to 75 cents on the dollar, yielding 11.41 percent, its lowest price for the note since June 2006.
GM is building about 5,000 fewer vehicles each day than its 2007 average of 16,000.
The world's largest auto maker has closed seven truck factories so far and plans to trim output at another this week.
The closures, sparked by a strike at former subsidiary American Axle & Manufacturing Holdings Inc, will help reduce a stockpile of GM trucks that on February 1 was 24 days higher than the industry average.
At the beginning of last month, GM had 627,600 trucks in inventory, enough to supply US dealers for 113 days, according to the latest figures from trade publication Automotive News.
Analysts consider a 60-day supply normal.
"GM's truck supply can actually benefit by not producing as many," Efraim Levy, a Standard & Poor's equity analyst in New York, told Bloomberg News.
"Anything less than a month is a good thing, then it starts to get difficult."
The auto maker on Friday announced nine additional engine, transmission and metal-stamping factories would be closed from today in Michigan, Indiana, Ohio and New York states.
That would take the number of affected parts and auto-assembly factories at Detroit-based GM to 29.
GM spokesman Tom Wickham declined to comment. GM has said the plants would remain closed, or on reduced schedules, indefinitely until American Axle resolves the strike.
The walkout began February 26 over wage, health-care and pension issues.
American Axle held negotiations with United Auto Workers leadership on Friday, and the talks were expected to continue, spokeswoman Renee Rogers said.
GM, American Axle and other suppliers may be put on CreditWatch should the work stoppage "drag on more than another week or so," S&P debt analyst Robert Schulz said.
GM has halted production at large pickup and sport-utility vehicle plants in Ohio, Michigan, Indiana and Ontario.
GM doesn't provide its production totals for the Hummer H2 plant in Mishawaka, Indiana, or joint-venture plants in Ingersoll, Ontario, and Fremont, California.
GM fell 39 cents to US$21.96 in Friday's New York Stock Exchange composite trading, for a seventh consecutive decline and a 22-month low.
American Axle gained US$2.13, or 11 percent, to US$22.28, after a KeyBanc Capital Markets report said the supplier may save US$50,000 annually per worker following the strike.
GM's 8.375-percent note due July 2033 fell 0.94 cent to 75 cents on the dollar, yielding 11.41 percent, its lowest price for the note since June 2006.
Source: 中华网
Keywords:auto; car; electric cars
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