Good thing that the automobile industry isn’t very important to the US economy. From Wolf Richter at wolfstreet.com:
But GM already booked those vehicles on dealer lots as revenues.
GM has been reacting to its fabulously ballooning inventory glut by piling incentives on its vehicles. But that hasn’t worked all that well though it cost a lot of money. Now it’s time to get serious.
It will temporarily close five assembly plants in January and lay off over 10,000 employees, spokeswoman Dayna Hart said today. Plants that assemble cars will be hit, according to the AP:
The company’s Detroit-Hamtramck factory and Fairfax Assembly plant in Kansas City, Kansas, each will be shut down for three weeks, while a plant in Lansing, Michigan, will be down for two weeks. Factories in Lordstown, Ohio, and Bowling Green, Kentucky, each will be idled for one week.
The factories make most cars in the General Motors lineup including the Chevrolet Cruze, Camaro, Corvette, Malibu, Volt, and Impala; the Cadillac CT6, CTS and ATS; and the Buick LaCrosse.
While retail sales for the 11 months of the year edged up less than 2%, GM expects sales to rental companies to drop by about 75,000 vehicles this year. And rental companies buy mostly cars.
Sales of trucks and SUVs accounted for nearly 62% of all GM vehicles sold in November in the US, a record percentage. But car sales stank.
With car sales slowing for months, GM has kept production up, trying to move the iron with incentives, but that hasn’t worked. And overall inventory on dealer lots has soared to 874,162 vehicles at the end of November, up 26.5% from a year ago, up 28% from last July, and the highest level in eight years when GM was skidding into bankruptcy during the Great Recession. This pile of vehicles translates into 87 days’ supply.
To continue reading: “Car Recession” Bites GM: Inventory Glut, Layoffs, Plant Shutdowns