Japan Quake Trims GM Production

The quakes in Japan limit parts supplies to a number of GM assembly locations, and the shutdowns effectively amount to a rationing of those parts to sites where they are needed most.

James M. Amend, Senior Editor

April 22, 2016

2 Min Read
Redhot Chevy Malibu affected by GM shutdowns
Red-hot Chevy Malibu affected by GM shutdowns.

General Motors plans to idle four assembly plants for at least two weeks in response to last week’s earthquakes in Japan, a stoppage that will cost the automaker an estimated 33,000 units of production, according to WardsAuto data.

GM officials tell WardsAuto the automaker expects to recoup the output before year’s end.

“We’re fully planning on making up production during the calendar year,” GM spokesman Tom Wickham says.

The four facilities going dark on April 25 include Fairfax, KS, which is projected to lose 12,000 units; Spring Hill, TN, expected to see a 5,000-unit shortfall; Lordstown, OH, with an estimated loss of 11,000 builds; and the Oshawa, ON, Canada, flex-line forecast to give up 5,000 cars.

Oshawa builds the Buick Regal, Chevy Impala and Cadillac XTS sedans seeing recently weak demand, so the impact on sales should be limited.

However, Fairfax is home to the Chevy Malibu midsize car, which saw sales surge 33.3% last month on the strength of its stem-to-stern redesign. It closed March with a 42 days’ supply, a relatively light inventory stock given the plant is in launch mode and the car is backed by lots of marketing muscle.

Lordstown and Spring Hill also are in launch mode. Lordstown is ramping up production of the redesigned Chevy Cruze compact car, while Spring Hill just began output of the all-new Cadillac XT5 midsize CUV and redesigned GMC Acadia large CUV.

The Cruze is a pivotal launch for GM because of the sales volume the car produces, while the XT5 replaces Cadillac’s best-selling vehicle, the SRX. The Acadia is a profitable seller with a redesign meant to make it even more appealing to buyers.

The quakes in Japan limit parts supplies to a number of GM assembly locations, and the shutdowns effectively amount to a rationing of those parts to sites where they are needed most.

The automaker does not expect the production adjustments to affect its financial results for the second quarter or the full year.

However, the shutdown does recall the devastating earthquake and tsunami Japan suffered in 2011. That disaster was of a much larger scale than last week’s and rippled through the entire industry for months.

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