Klaus
08-26-2004, 10:30 PM
General Motors Slows Production Of Hummer H2
By LEE HAWKINS JR.
Staff Reporter of THE WALL STREET JOURNAL
August 25, 2004; Page B8
General Motors Corp. told the company that manufactures its Hummer H2 sport-utility vehicle to slow down production in response to cooled consumer interest in the supersize vehicles.
Sales of the hulking Hummer and other large trucks and SUVs gradually slowed in recent months as gasoline prices have hovered close to $2 a gallon, or more in some parts of the country. The move comes as GM is struggling to get overall higher-than-normal inventory levels under control, and said last week it was cutting production, by less than 4%.
The move also comes as union leaders at some other GM plants are worried that the auto maker could be forced to make additional production cuts to other models.
GM has acknowledged that Hummer inventories are running high but said it hasn't noticed a decline in orders. "We are doing this to get our inventories in line," said Pete Ternes, a GM spokesman. "The selling rate will remain the same. It's been very consistent for the last 18 months." Mr. Ternes said GM is offering incentives to dealers to "close out the 2004 models."
Lee Woodward, a spokesman at AM General Corp., South Bend, Ind., which makes the Hummer H2 there, said it plans to end its second Hummer production shift Oct. 25. Second-shift workers will move to the first shift and to a nearby plant that builds military Humvees. Hummer H2 sales are down 26% through the end of July. The H2 also has become a target for environmentalists and others who see the fuel-thirsty truck as a symbol of excess.
Stocks of unsold GM vehicles have hovered at high levels for most of the year. Recently, some large-vehicle retailers and car dealerships said they were cutting back orders of 2005 vehicles because they were overloaded with 2004 models. GM is discounting many of its 2004 models. "If gas prices keep going up or stay at this level, anything is possible," said Jimmy Conway, president of United Auto Workers Local 276, in Arlington, Texas. "It's not good for the economy at all. There is always a concern about [production cuts], especially with these gas prices. We are concerned about the high price of gas and what impact it could have on future productivity."
Talk of possible production cuts is rippling through GM's plant in Moraine, Ohio, which makes midsize sport-utility vehicles like the Chevrolet TrailBlazer and GMC Envoy. A letter to union workers there said union officials met with the plant manager and personnel director so management could "inform the union that the corporation has notified local management that there will be a cutback in production volume at Moraine Assembly due to a lack of sales/orders of the current products that we build."
By LEE HAWKINS JR.
Staff Reporter of THE WALL STREET JOURNAL
August 25, 2004; Page B8
General Motors Corp. told the company that manufactures its Hummer H2 sport-utility vehicle to slow down production in response to cooled consumer interest in the supersize vehicles.
Sales of the hulking Hummer and other large trucks and SUVs gradually slowed in recent months as gasoline prices have hovered close to $2 a gallon, or more in some parts of the country. The move comes as GM is struggling to get overall higher-than-normal inventory levels under control, and said last week it was cutting production, by less than 4%.
The move also comes as union leaders at some other GM plants are worried that the auto maker could be forced to make additional production cuts to other models.
GM has acknowledged that Hummer inventories are running high but said it hasn't noticed a decline in orders. "We are doing this to get our inventories in line," said Pete Ternes, a GM spokesman. "The selling rate will remain the same. It's been very consistent for the last 18 months." Mr. Ternes said GM is offering incentives to dealers to "close out the 2004 models."
Lee Woodward, a spokesman at AM General Corp., South Bend, Ind., which makes the Hummer H2 there, said it plans to end its second Hummer production shift Oct. 25. Second-shift workers will move to the first shift and to a nearby plant that builds military Humvees. Hummer H2 sales are down 26% through the end of July. The H2 also has become a target for environmentalists and others who see the fuel-thirsty truck as a symbol of excess.
Stocks of unsold GM vehicles have hovered at high levels for most of the year. Recently, some large-vehicle retailers and car dealerships said they were cutting back orders of 2005 vehicles because they were overloaded with 2004 models. GM is discounting many of its 2004 models. "If gas prices keep going up or stay at this level, anything is possible," said Jimmy Conway, president of United Auto Workers Local 276, in Arlington, Texas. "It's not good for the economy at all. There is always a concern about [production cuts], especially with these gas prices. We are concerned about the high price of gas and what impact it could have on future productivity."
Talk of possible production cuts is rippling through GM's plant in Moraine, Ohio, which makes midsize sport-utility vehicles like the Chevrolet TrailBlazer and GMC Envoy. A letter to union workers there said union officials met with the plant manager and personnel director so management could "inform the union that the corporation has notified local management that there will be a cutback in production volume at Moraine Assembly due to a lack of sales/orders of the current products that we build."