General Motors Cuts Pickup Production

By: Anthony Fontanelle

With light trucks sales on the decline and auto buyers demanding for more fuel efficient vehicles, it is not a surprise that automakers will slow down or even stop production of SUVs and light trucks. But the Big Three, which are known for having an almost monopoly on these light trucks, are loath to reduce the number of SUVs and pickup trucks that they produce. That was the case until General Motors announced that they will be cutting the production of pickup trucks.

The Detroit News reported that the largest American automaker has announced that they will be producing less Chevrolet Silverado and GMC Sierra units. The reason for the production reduction is the sluggish sales of these large vehicles. Although the Silverado is still racking up strong sales figures, the automaker continually has to contend with the trend which saw the sales of pickups in general slowing down.

According to reports, the automaker will be reducing the production of the Silverado and the Sierra by 20 percent. As can be expected, this planned reduction in production will affect workers. The Detroit News reported that an estimated 500 temporary workers will be affected. The reduction in production as well as in the workforce will start early September at the automaker's Pontiac assembly facility in Michigan according to General Motors.

Both the Sierra and the Silverado has been redesigned recently by General Motors in an effort to attract more buyers. This step though did not enable the Silverado and the Sierra to stay at the top of their segment. The reason is intense competition from Ford and Toyota pickups. The popular F-150 is being offered by the FoMoCo with big discounts. On the other hand, the redesigned Toyota Tundra is also offered by the Japanese automakers with discounted prices.

Instead of offering discounts for the Silverado and the Sierra which would mean lower profits, General Motors decided to lower production. The automaker, just like Ford and Chrysler, is in the middle of its turnaround plan after years of lagging behind Japanese automakers in terms of sales increase. With the production of the Silverado and the Sierra in the Pontiac facility, it can be expected that the automaker will also reduce their production of auto parts such as the .

By reducing their production at the Pontiac facility, General Motors is now being more at risk of being overtaken by Toyota as the world's largest automaker. Last year, Toyota sold more vehicles worldwide than General Motors. But the title of being the largest automaker refers to the automaker with the most number of vehicles produced. This year, Toyota's estimated production is larger than that of General Motors. And with the production reduction at one of General Motors' key assembly facility, General Motors looks to hand the title it has owned for decades over to Toyota.

The GMC Sierra and the Chevrolet Silverado are not only produced at the Pontiac, Michigan auto assembly facility. These pickups are also produced at General Motors's facilities in Flint, Michigan; Fort Wayne, Indiana; Oshawa, Ontario; and at Silao, Mexico. While the pickup trucks are also produced at these facilities, General Motors did not announce that there will be a reduction in production at these sites.

With the plan set to be implemented on September, General Motors made it clear that they are pushing through with their plans to reduce workforce as a part of their turnaround plan to bring the company back to profitability.

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