The Freep reports
General Motors plans to add a second shift worth as many as 1,000 jobs to its Detroit-Hamtramck plant late this year, as the automaker prepares to ramp up production of its Chevrolet Volt extended-range electric car.
Current plans have second-shift workers arriving for training late this year and starting production in earnest in early 2012,
Now, it makes sense that any “more assembly jobs are coming” story would play big in Detroit, but does this mean GM has its suppliers lined up for a second shift of Volt production? Can the market support the increased volumes GM has been talking about (25k instead of 10k this year, 60k+ instead of the planned 45k next year)? As it turns out, those questions haven’t actually been answered yet…
The Freep’s report quoted Hamtramck plant manager Teri Quigley, but apparently the brass at the RenCen aren’t ready to commit to the timetable she gave. In a statement to WWJ-CBS Detroit, GM clarified
Detroit Hamtramck has started some of the pre-work related to adding an additional shift at the plant. Volt volumes remain unchanged (10,000 this year, 45,000 next), but the plant wants to be in a position to bring on a shift as quickly as possible when we are asked to increase production to meet market demand.
At this point in time, it is too early to tell how many employees would be required or when an additional shift will start — we are just doing some pre-planning to ensure we can respond quickly to market conditions.
GM will phase out DTS and Lucerne production at Hamtramck later this year, and will likely tool up for production of the updated Malibu this summer. Meanwhile, plant space and people are the two least-significant factors constraining production of the Volt, as Detroit-Hamtramck is one of GM’s biggest plants, and the firm has some 2,500 assembly workers in layoff. Suppliers, and consumer demand are the big questions, and for all their bluster about redlining Volt production GM’s brass hopefully knows it’s easier to slowly ease up production than to overinvest and have to whipsaw back.
This may sound dumb, but why? Doesn’t GM lose money on every one of these things? Wasn’t the whole VOLT thing basically an expensive taxpayer funded PR stunt?
GM is covering production cost, but not necessarily driving profit.
Volt was being designed far before carmageddon.
Volume is the key to profitability.
Yes, they do lose money on every one. The bitter irony is that as production volume ramps up, the cost savings and profits realized via higher volumes will be wiped out when the government subsidy dries up due to the car’s popularity.
Paul: Profitability is only possible if you assume that variable costs are less than sale prices. That is far from a certainty for the Volt. Considering how unnattractive the Volt’s MSRP is, there is a strong chance that it will be a loss leader no matter how thinly fixed costs are spread around.
How many Volts is Chevy actually making now?
I know they’re admitting sales of about 10/day (315 in Jan, 280+ in Feb), and they’re saying that they’ll make 10K this year – but how many rolled off the line today? This week? So far in March?
Anybody know – or know where to find out?
This article says that they produced 1800+ in Feb.
And how many states are they selling Volts in?
Last time I checked, mine was not one of them.
The customers that I have which are building parts for that car – and I am talking about more than one supplier – are making an awful lot more than 10 parts per day.
Maybe local bake sales provided the funds needed to pay wages for those brought back from the jaws of laid-offedness.
Why? On the face of things, at this rate Chevy stands to sell maybe half of the originally planned 10k cars.
GM’s excuse is that they haven’t gotten demo cars to all the dealers yet (How? You’ve got at least 900 cars you haven’t sold) and that they have something like 100,000 people on the waiting list. This will all be sorted out by May, they say. Even if that’s true and this car is in high demand, why isn’t every one being sold before it rolls of the truck? Is GM’s sales and distribution network really this bad? How is it that you’ve apparently botched the launch of your most hyped product ever?
Honestly, even once you get past supply issues and sleazy dealer markups, nobody’s going to buy this car. Hollywood types will, as will grandstanding politicians and yuppies who really want to show how much greener and superior they are, but can’t afford a Fisker Karma. But normal people who need a normal car to get to a normal job? No way.
Not to worry. If GM ramps up Volt production, it will be because they already have the sales lined up… to governments and ward-of-the-state entities like GE, which already promised to buy 12,000. If costs overrun revenue, you and I will pick up the difference.
If governments or GE(owners of the politicians perpetrating ecoscam) are buying the cars, we’re paying anyway.
Haven’t heard this in a long time. Can you hear it too? It’s the sound of one hand clapping.
Considering we only know two numbers:
Deliveries to Date
Production to Date
I think a lot of speculation is going on in these early months without knowing:
maximum output per day from factory (ie. capacity)
number of cars sent to dealers for demo units
how will the car sell when available in all markets
number of cars put into fleets (like GE)
number of cars that dealers are trying to get ‘extra’ markup on
number of cars that have been preordered for buyers
etc.
With any new car, I don’t think the first 6-12 months of production/sales can tell you very much about future sales performance. Is it capacity constrained, is it a flash in the pan, etc.
The one thing that I think everyone here could agree on is that the lower the price of the Volt becomes the more sales they will get.