As demand goes, so also goes production. With sales dropping month after month, nearly every major player has been slowing or shuffling production for some time now. Today we are being treated to a pile of cutback stories that is so large as to invite speculation on the timing of the simultaneous announcements. By the way, if you love conspiracy theories and have the [sub], AN’s James B Treece will tell you his favorites. Just remember, all that glitters is probably tinfoil. Anyway, back to the horrible news about how horrible everything is. GM is slashing 250k units from its Q1 production plan, reports Automotive News [sub], a move that affects “virtually” every GM plant. The General Motors that built 885k units in Q1 of this year is looking at a production target of 425k for Q1 2009. GM denies that it will close all its plants for all of January, but according to spokesfolks “it’s safe to say that most of our plants will be closed the week of Jan. 5.” And GM is far from alone. Chrysler, Honda, Subaru and Toyota all have their own awful news to pile up on the mess.
Chrysler is extending its Christmas production vacation, which now runs from December 22 through January 5. The Viper plant is supposed to be closed this week, and Toledo North (Liberty) is losing its second shift.
Honda is dropping 119k units from its Q1 production plan (actually Q4, as the Honda fiscal year ends March 31) to fight a 45 percent increase in inventory between September and December. Honda’s latest cuts will include 58,000 units from its two Ohio plants (Civic, Accord); 18,000 from its Lincoln, Ala. (Pilot, Odyssey), plant; 37,000 from its Canadian plants (Civic, CSX, MDX, Ridgeline), and 6,000 from its new plant in Greensburg, Ind. (Civic), which was not up to full production. Even with these cuts, Honda will end its fiscal year having logged its fourth-highest annual North American production number.
Subaru will idle its Lafayette, Ind (Legacy, Outback, Tribeca) production between Dec. 22 and Jan. 19. Subarus will also be built on half shifts at Lafayette on Jan. 30 and Feb. 13 and 27.
Meanwhile, Toyota isn’t announcing the same production cutbacks, but it’s got plenty of sour news to strew around. An ominous “high level company report” has surfaced at the Freep saying Toyota “projected a $900-million increase in U.S. manufacturing compensation by 2011, and human resources officials were working on trimming that by one-third.”
Automotive News [sub] reports that Toyota is trying to “boost competition” by dissolving its US seat supplier joint ventures. And Bloomberg reports the big T is canceling its annual national dealer meeting. The last time that happened? 9/11, apparently. So yeah, the news ain’t great right now.
Not yet ready to say conspiracy. If they were smart enough to create an effective conspiracy, I think they would be smart enough to have not gotten into this kind of business trouble in the first place.
Any news on auto sales in Latveria?
@ Ed
Where does this place the GM “worst case” restructure plan presented in testimony just 10 days ago? The units they claim for 2009 aren’t even close I would suspect.
During Oct/Nov, Automotive News was predicting an uptick in North America light-vehicle Dec 08 when even in Dec 07 there was a huge drop!
Subaru’s Legacy/Outback sales have slowed considerably, but a new generation Legacy is slated for delivery by mid-2009.
With the slowdown in demand and vehicles piling up on dealer lots, now would be a great time for the D3 to shut down for a few months while they go through C11.
Interesting in that Honda’s production appears to be a flat cut “across the board” at all plants. Rated per line and speed, it looks like a straight 30% odd production cut. Considering the whole market looks to be down about that or a little less, they appear to be holding serve, not adjusting their mix overly.
Slide on over to Autoextremist where Sweet Pete is forcasting the end of the world as we know it. Well not really but he is spewing the same crap we been hearing from the MSM for weeks now. The demise of the D3 will bring the nation down with it and then we will see just how important the ‘domestic’ industry is to the future of America! Being a little bit extreme me thinks. Oh wait, that’s his MO isn’t it?
Either he sees his paycheck about to disappear or he lacks faith in the good ‘ol US of A!
Anytime I see “conspiracy” and “9/11” in the same article, even if they don’t relate the two, I get sick to my stomach.
I think this illustrates the problem with bailing out anyone…The jobs are related to the number of cars sold, not the number of companies making them.
“The General Motors that built 885k units in Q1 of this year is looking at a production target of 425k for Q1 2009.”
Wow, just wow. I don’t think any already struggling business can survive a volume plunge of over 50%.
“The plight of your weak and pedestrian automobile industry is beneath the concerns of Von Doom.
And, because it must be said, CURSE YOU RICHARDS!!!”
I swear the local Indy news reported that Toyota was slowing production of Camrys in the Subaru SIA plant, but that they were going to start exporting Sequoias built in Indiana abroad.
eamiller :
December 13th, 2008 at 10:32 am
I swear the local Indy news reported that Toyota was slowing production of Camrys in the Subaru SIA plant, but that they were going to start exporting Sequoias built in Indiana abroad.
The first part of that is confirmed. I haven’t heard about the second part, although it makes sense. If Toyota was going to cut Camry production, doing so first at a facility they don’t directly own but just have a contract for would make the most sense, IMHO.
If production volumes are dipping by that much, I’m waiting to lay my fingers on a post 2009 Q1 Subaru Legacy. Quality should be excellent, theoretically.