GM Shuts Down Four Assembly Plants For Lack Of Demand

Louis Rocha, vice president of UAW Local 5960, confirmed yesterday, December 19th, that the Orion Assembly Center in Lake Orion is not manufacturing a single vehicle this week in order to reduce inventory levels. The automaker’s Detroit-Hamtramck Assembly Plant, where GM manufactures the Chevrolet Volt among other vehicles, is also idling production this week.

Employees at the Orion Assembly Center, where the automaker builds the subcompact Chevrolet Sonic and small Buick Verano, will return to work on January 2nd. GM officials refused to give information regarding the Orion or Detroit-Hamtramck downtime.

“We don’t discuss scheduling issues,” said Orion Assembly plant spokesman Kevin Nadrowski. “We build what the market demand is.”

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Steve - 12/21/2012 9:32:07 AM

+2 Boost

Nadrowsky's statement, "We build what the market demand is", is quite revealing. Does anyone remember the episode in which Homer Simpson got to design a car, and it was an epic flop?

The innovative approach is to create something outstanding that creates new demand. Take Apple for example. They didn't create a better Walkman, Sony's superb-sounding and very successful cassette tape player that was just a little bigger than a cassette tape case -- They redefined the personal music player and created the now ubiquitous iPod MP3 player. Similarly, they didn't go head to head with Palm Treo, Blackberry, and Nokia smart phones (the industry leaders at the time) -- they created a totally new kind of phone, the run-away success, the iPhone, which eventually, the rest of the industry tried to emulate.

Similarly, in the auto industry, BMW looks 10 years ahead and attempts to project what trends they can exploit then, and they try to capitalize on them. Love them or hate them, BMW is consistently profitable, quarter after quarter, even in severe recessions, and even shortly after they bought Rover, realized their mistake, sold it at a massive loss (they even paid to unload it!)

There's something hugely wrong in the way that GM is run, and that starts at the top. Low demand for their products is just one example of their woes. Needing massive tax-payer bailouts to survive is another.