Inventory on small and mid size sedans is getting so out of control for GM that they are now considering killing off 6 cars. A report from Reuters confirms that the UAW is in talks with GM about their slow production and large inventory, primarily at GM’s Hamtramck plant in Detroit.
Four out of the six cars on the chopping block are produced at Hamtramck and they include the Buick LaCrosse, Chevy Impala, Cadillac CT6 and Chevy Volt. The remaining two likely to be cancelled are the slow selling Chevy Sonic and the aging Cadillac XTS.
The concern from the Union is that jobs are being lost due to slow sales and they believe this can be remedied by simply re-purposing the plant to produce more popular models like Trucks, cross overs and SUVs.
In the past, GM would dump cars like this on rental car fleets or government use vehicles. This would clear out inventory but rarely produce a profit. This time around, they are cutting hours and jobs all together and the writing is on the wall for some major plant restructuring.
The first half of 2017 was down 32% from 2016 with an inventory excess of 6 months when 2 months is the normal industry standard. Sounding a little out of touch, GM’s president of North American operations had this to say according to Reuters:
“I don’t think we have too many sedans.” Before adding, “We’re in a good place to have a good 2017.”
Time will tell if reducing small and mid size cars in favor of larger SUVs and trucks is a good idea. Any large spike in fuel costs could prove that to be a fatal mistake.