In a bit of positive news, General Motors has released news yesterday that a decision has been made to keep its U.S. compact-car factory working overtime for the rest of 2008. Seemingly at odds with the world’s economic state, Chevrolet is asserting that the Cobalt’s sales drop of 17% from last year is the result of their inability to meet demand for the car. Anyone else amazed that GM still only has ONE compact-car factory in the U.S.?
GM’s shortfall of Chevrolet Cobalts is also suprising given that its Ohio assemby plant has been working with a third shift since this summer. Cobalt sales fell 17% in September compared to a year ago, a drop that GM attributes to short supply and not the countries financial woes. Cobalt sales for the year are up 6% while GM’s sales overall have fallen 18%. The auto maker, along with many of its rivals, has been scrambling to re-tool U.S. manufacturing operations from large trucks and SUVs towards economy vehicles. Although the Cobalt is highly in demand, not all small car sales are up. As a clear sign of the credit issues that have been “addressed” by Congress this week, sales of the Toyota Corolla and Honda Civic fell last month. Dealers across the country report that they have less than eight weeks’ worth of all three vehicles in stock, according to sources. The industry norm is to generally have at least 10 weeks supply. Making out better, in terms of supply is the Ford Focus, which is reporting a 92 day supply. The Focus also an increase of 5% in sales last month.
GM, in addressing the shift to smaller cars, has said it will close four truck plants by at least 2010. Despite the current shortfall in production, GM has no plans to build new car assembly plants or convert these truck factories, instead responding the increased demand by the addition of shifts at existing facilities. GM is, however, building a new small-engine plant in Flint, Michigan to respond to increased demand in that aspect of production. In the past year, engine shortages have disrupted operations at least one plant, which forced the automaker to cancel overtime shifts in an effort to balance powertrain and vehicle production numbers.