Sales dip so GM cuts truck, SUV production

By Tom Stundza -- Purchasing, 4/30/2008 11:51:00 AM

A dwindling U.S. auto market and an accelerating shift from light trucks to cars means that General Motors Corp. will cut assembly of full-size pickup trucks and sport utility vehicles. GM said it will make about 88,000 fewer pickups and 50,000 fewer big SUVs this calendar year because of the cuts.

Making matters worse, says CarConnection.com, GM is facing a series of labor problems that could cripple other assembly operations – on top of an ongoing labor dispute at a key supplier that has already shuttered 30 GM factories. GM is facing the threat of its own labor trouble at plants making its midsize and crossover vehicles – which are actually gaining ground in the current economic crunch – and some of its own parts. The automaker and the UAW settled on a broad, national contract last year, but several union locals have so far failed to secure agreements covering their own, specific factories.

For about the past three years, the U.S. auto market has been shifting from pickup trucks and SUVs to cars and crossover vehicles, but the trend picked up in recent months due to gas prices that have reached $3.60 per gallon, on average. Jesse Toprak, chief industry analyst for the auto information site Edmunds.com, tells the Reuters News Service. GM has a 92-day average supply of large trucks. A 60-day supply is considered optimal in the business.