The United Auto Workers (UAW) strike at American Axle is starting to take its toll. According to the Detroit Free Press, the axle shortage has caused GM to halt production at the end of the first shift at Pontiac Truck and Bus plant. The Pontiac plant makes Chevy Silverados and GMC Sierras; thanks to a healthy inventory (153-day supply of Silverados and 152-day supply of Sierras) and continued production through the month, there's plenty of product on dealer lots to see them through the next few weeks. However, as the strike shuts down other plants, other suppliers will start to shut down or cut back production to match the diminished demand. Although GM accounts for 80 percent of American Axle's business, they also supply axles for Dodge Ram pickups (122-day supply). No word on how the strike will affect Dodge's assembly plants. But the question of the day (for now) is this: with 25 percent of Detroit's large suppliers in or teetering on the brink of bankruptcy, will one (or more) of them kill the golden geese?
Find Reviews by Make:
Read all comments
But this may help the big 2.8 to pare down the excess supply that’s sitting on dealer lots.
It might, but with the economy slumping and Ford already stating to expect at least a 10% drop in sales I wouldn’t count on it too much.
The real big news for me will be the effects it has on other parts suppliers. How will the cut back in production of autos due to a lack of axles affect them?
Waiting for more Plastech type stories.
I stopped at the local Buick/GMC/Isuzu dealer last night just to look around and see what kind of new and used trucks they had available(as much as I don’t enjoy driving trucks I could really use one right now). They didn’t have 1 single simple work truck, but they sure had tons of overly expensive HD, crew cabs with chrome and leather 4WD, SUV’s and CUV’s. And every inch was filled with stock including every patch of grass and the entire back lot. 4-5 Enclaves, more than a dozen Acadias, close to 100 trucks and fullsize SUV’s and about 25 Buick cars. This is just an average sized dealer, they are just stocked to the gills.
They need to scale down production to get rid of their huge overstock, this might help that a little but will cost them money in the process. I think they keep thinking their hugely profitable overly expensive trucks and SUV will bounce back and the money will start rolling in. I’m waiting for the incentives to get huge since I know it’s never going to boom again. Anyone know what the out the door price with all the cash on the hood is for one of their 2WD regular or extended cab Sierra’s with a V8 is?
5 months of stock for both Silverado and Sierra. Holy crap that seems excessive. Is that the norm?
Bancho :
5 months of stock for both Silverado and Sierra. Holy crap that seems excessive. Is that the norm?
60 days is considered ideal. And we now know why GM was building MORE trucks back in January, when the market was cratering.
60 days is considered ideal. And we now know why GM was building MORE trucks back in January, when the market was cratering.
Are you saying GM knew this strike was coming?
I think they are holding on to the dream that truck sales will come back to where they once were. They have structure their company around the high margins they generate and keep talking like the housing market is going to bounce back quick.