• Aug 13, 2006
General Motors Co. seems to be reacting to news that sales of large SUVs, such as the Chevy Suburban and GMC Yukon, are plummeting. GM CEO Rick Wagoner stated in an interview that the automaker will begin to slow production of its full-size SUVs for the rest of the year. While he would not elaborate on what this 'slowdown' entailed, he mentioned that cutbacks would be made to "some" overtime at the company's plants while revamping their vehicle lineup to include other models.

According to Ward's, sales of large SUVs have dropped 22 percent from January through July of 2006.

Related:
By the Numbers: July 2006
U.S. Sales: SUVs and trucks drag down GM, Ford, Chrysler
Consumers think twice about SUVs

[Source: Wall Street Journal via Sun Sentinel]


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  • 30 Comments
      • 8 Years Ago
      This is something they should have been planning on for at least the last 5 years.
      • 8 Years Ago
      This has nothing to do with slowing sales. GM had its factories running on overtime to build inventory. If you look at sales of its trucks and SUV's, you would realize that they are selling more than they did back in March and April when they were supposedly "hot." They are just scaling down to meet demand instead of building inventory.
      • 8 Years Ago
      Wait a minute - if they cut production, the workers will idle and get placed into a job bank, where they get paid anyways. Seems to me they are better put to use just building something else. What about those Solstice and Sky's that people always say are sold out? Why can't they build them instead? Yes yes I know people are trained to build a particular vehicle, but robots do all the precision work nowadays anyways - how hard could it possibly be to teach someone how to screw in a few bolts for a differnt type of dashboard?
      • 8 Years Ago
      I don't like SUV's - think they are mostly useless. And I don't like GM cars. But GM did as well as they could with the new Tahoe.

      The full size SUV and full-size truck market is huge and is very very profitable. Yes it has gone down 20% but this is like saying you caught a whale that only weighs 100 tons. Still not bad - much of this "big iron" goes out the door in the 40k range.

      GM likely knew gas prices would go up, but they had to chase the money as long as it lasted. And again even a down SUV market is huge.

      I also expect GM to go down less then Ford, etc. Their full-size SUV's get lousy mileage, but competitors (Toyota, Ford) get ultra-crappy. So market shrinks but GM increases its share.

      I would like SUV market to go down more quickly, but GM still does decent in today's down market. They need to so that they can survive their huge legacy costs . . .

      Question is: is American love for "big iron" till death do we part, or a passing fad? In 1970's, 1980's we downsized cars. Will see what happens in next 5 years.
      • 8 Years Ago
      gm one more time show that they are real professionals, i think, and produce cars which peoples want to byu;)
      • 8 Years Ago
      Hey,Silver, maybe GM's bread and butter should be, um, bread and butter. They don't seem to be doing so well at the automotive thing.
      • 8 Years Ago
      #11 Sounds like the kind of BS a GM spinmeister would say. You must have your head in the sand, or, maybe, somewhere else.
      • 8 Years Ago
      Maybe GM might be lucky if gas prices moderate in a few months.
      If so, GM can dust off the SUVs languishing in dealers' lots as sales increase.
      I don't think we'll see cheap gas again, but these shortages and gluts happen in cycles and I wouldn't be surprised to see gas prices come down in a few months.
      • 8 Years Ago
      "If you can't handle the medicine, go ahead and die."

      Let them die for all I care. After all the spoon-fed crap they have given us over the years, yes, let them die.

      Suck it up, Detroit, suck it up.

      http://detnews.com/apps/pbcs.dll/article?AID=/20060812/AUTO01/608120353/1148
      • 8 Years Ago
      we just retired from building the gas guzzling SUVs.The women driving these go from the mall to the day care to the mall. A joke!!!! thanks for all the mandatory overtime, we just bought a new ford f-150 and LOVE IT!! pulls our big boat just perfect with a personalized license plate perfectly named HER O T !!!!!!!!!!!!!!!!
      • 8 Years Ago
      Shiz, you raise some reasonable points about the details of Mulad's argument, yet nevertheless sound like you're making excuses for Detroit.

      Are you implying that Detroit's current product woes are entirely the result of outside forces that could not have been predicted? Are you suggesting that GM and Ford engaged in effective "risk management" in its product development strategies over the last half decade?

      If you answer yes to both of those questions, then I would suggest that you have succumbed to what Brock Yates once called "Grosse Point myopia" -- the remarkable inability of American automakers to recognize and respond to trends that are clear as day to foreign competition.

      These are not just "academic" issues: Detroit's survival depends upon correctly diagnosing why it is on the ropes.
      • 8 Years Ago
      Keep in mind that GM is reducing overtime, not regularly scheduled production. Granted overall SUV marketshare in the U.S. is declining, but these products remain very important to the General as they are very likely taking full size SUV marketshare from other OEMs.
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