18 Aug 2009
Aug. 18 (Bloomberg) -- General Motors Co., benefiting from the Obama administration's "cash for clunkers" program, is boosting production at car plants in Ohio and Michigan, people familiar with the matter said.The ramp-up is part of a broader increase that may be announced this week, said the people, who asked not to be identified because the schedule isn't public.
GM has added Friday shifts at its car plants in Orion Township, Michigan, where it assembles the Chevrolet Malibu and Pontiac G6 sedans, and Lordstown, Ohio, where GM makes the Pontiac G5 and Chevrolet Cobalt compact cars, Chris Lee, a GM spokesman, said. Those plants had been running four 10-hour days each week. The automaker will announce more production plans "mid-week," Lee said.
"They're probably seeing some demand that goes beyond what they would deem a boost just from cash-for-clunkers," said Erich Merkle, president of Grand Rapids, Michigan, consulting firm Autoconomy. "There are signs this economy is going to improve fairly quickly."
GM plans to add a second shift in Lordstown, said two people familiar with the matter. The Detroit-based automaker is preparing to add overtime and is considering adding a third shift to a plant in Kansas City, Kansas, where it assembles the Malibu and Saturn Aura, said two people with knowledge of the situation.
GM sales of cars and light trucks in the U.S. fell 19 percent in July, less than the 24 percent drop analysts expected.
Like Ford, Chrysler
Chief Executive Officer Fritz Henderson, 50, is working to maintain GM's No. 1 spot in the U.S. auto market while returning it to profitability after emerging from bankruptcy on July 10. The company will "definitely" add to production plans, he said Aug. 13, without sharing details.
Ford Motor Co. is boosting production by 26 percent in the second half, the Dearborn, Michigan-based automaker said Aug. 13. Chrysler Group LLC, based in Auburn Hills, Michigan, is also planning to make more light trucks, said a person familiar with the situation.
The U.S. government started a $1 billion program commonly known as "cash for clunkers" in July to encourage people to turn in old, less fuel-efficient vehicles for new vehicles that use less gas. Formally known as the Car Allowance Rebate System, it was expanded by another $2 billion this month.
