GM Suspends Some Truck Output on Japan Parts Shortage
General Motors Co. (GM), the largest U.S. automaker, will suspend production at its Shreveport Assembly in Louisiana for the week of March 21 because of a parts shortage resulting from the crisis in Japan.
All other GM plants in North America will continue to run normal operations, the Detroit-based automaker said today in a statement on its website. GM has enough vehicles to meet customer demand, and production at Shreveport will resume “as soon as possible,” the company said.
GM is suspending production earlier than expected, said Tracy Handler, a production analyst at researcher IHS Automotive. Chrysler Group LLC said yesterday it could take four to six weeks for Japan’s disaster to affect its supply chain.
“We didn’t expect for this ripple to hit quite this fast for North American plants,” said Handler, who is based in Northville, Michigan.
GM fell 34 cents, or 1.1 percent, to $31.44 at 4:15 p.m. in New York Stock Exchange composite trading after earlier climbing as much as 1.9 percent. The shares have dropped 4.7 percent from their initial public offering in November.
The Shreveport facility has 923 employees and makes the Chevrolet Colorado and GMC Canyon pickups, according to GM’s website. Canyon sales in the U.S. last year fell 21 percent to 7,992 vehicles, and Colorado deliveries dropped 24 percent to 24,642. GM sold 2.22 million vehicles in the U.S. last year.
GM may be suspending Shreveport production earlier than it needs to in order to redirect parts supply to better-selling vehicles, IHS’s Handler said in a telephone interview.
Kim Carpenter, a GM spokeswoman, declined to specify which parts are in short supply. In response to questions about GM’s production strategy, she referred to the statement, which said the automaker will “supply the most critical operations” in responding to the events in Japan.
Chrysler, which hasn’t had its production disrupted by last week’s earthquake in Japan, is getting a daily report from the region and there is a risk that production could be lost because of parts not coming from Japan, Dan Knott, senior vice president for purchasing, said yesterday in an interview at the automaker’s headquarters in Auburn Hills, Michigan.
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