By Jeff Green
Aug. 22 (Bloomberg) -- General Motors Corp. is trimming production at six North American plants that make large pickup trucks and sport-utility vehicles as the biggest U.S. automaker moves to clear dealer lots of excess inventory.
The factories will eliminate previously scheduled overtime the rest of the year for models such as the Chevrolet Suburban SUV and GMC Sierra pickup, company spokesman Tom Wickham said in an interview today. The reductions began this week.
``Those vehicle sales are slumping,'' said David Leiker, an auto-parts analyst at Robert W. Baird & Co. in Milwaukee, who was expecting a fourth-quarter cut in output by Detroit-based GM. ``The fact that they are doing it earlier indicates that the sales trend is getting weaker and they couldn't wait.''
GM already offers no-interest loans for as long as five years and rebates as high as $4,000 on light trucks after sales fell in July, including a 29 percent drop for Chevy Silverado large pickups. Light-truck sales have improved in August because of the incentives, GM has said.
``The month has been better than July, although we are still not where we'd like to be,'' Paul Ballew, director of market and industry analysis for GM said in an interview today.
Ballew said large truck sales have improved significantly. The production cuts were a result of lower sales through the first half of the year, he said.
The affected factories are in Arlington, Texas; Janesville, Wisconsin; Fort Wayne, Indiana; Flint, Michigan; Oshawa, Ontario; and Silao, Mexico, Wickham said.
Planned Output
GM said on June 1 that it would raise North American output this quarter 2 percent to 1.075 million cars and trucks. The automaker won't update those plans until Sept. 4, Wickham said.
The shares rose 25 cents to $31.33 at 4:01 p.m. in New York Stock Exchange composite trading.
GM's lower output will affect auto-parts suppliers such as American Axle & Manufacturing Holdings Inc., Magna International Inc., Superior Industries International Inc., Lear Corp. and Tenneco Inc., Leiker wrote in a report today.
Eliminating overtime during the previous 12 months would have cut GM's production 12 percent, he estimated.
The automaker also is shutting down a Hamtramck, Michigan, plant that makes Buick and Cadillac sedans for a week each in October, November and December to cull inventory, Wickham said.
Last month, GM said it planned to trim production 17 percent at a Pontiac, Michigan, factory starting in September, slowing hourly output of one-ton and three-quarter-ton Silverado and Sierra pickups.
Chrysler LLC President Tom LaSorda said yesterday that the Auburn Hills, Michigan-based automaker hasn't made any decisions on whether to cut production this quarter. LaSorda said he won't break his vow to dealers to control the inventory levels if the economy slows.
Ford Motor Co. said June 1 that it would cut third-quarter production less than 1 percent to 640,000 cars and trucks from 642,000 for the same quarter last year. The Dearborn, Michigan, automaker hasn't revised that figure.
To contact the reporter on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net
Last Updated: August 22, 2007 16:03 EDT
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