GM closes factories to reduce inventory

General Motors will soon idle 13 North American plants for multiple weeks to reduce dealer inventory. The shutdowns will be staggered and vary in length from two to several weeks. These temporary closings are in addition to the traditional summer breaks for U.S. and Canadian assembly plants. Adjusting production to suit demand is a normal practice. Other companies, such as Honda and BMW, are doing it, as well.

At the end of March, approximately 767,000 GM vehicles were in U.S. dealer stock. To better reflect projected market conditions, GM wants to reduce that figure to 525,000 vehicles by the end of July.

In addition, GM says this action will aid its efforts to work with troubled supplier Delphi, who began bankruptcy proceedings about four years ago and continues to face finance challenges.

The plant closings will not impact the newest GM models, including the Chevrolet Camaro and upcoming Buick LaCrosse.

Closing the factories should help GM and its dealer bodies better align supply with demand, though it will certainly impact employees and suppliers.

For car buyers, this is a sign that the extraordinary deals often available now may begin to fade away come summer, with the industry as a whole likely to be better balanced come the fall model-year change over.

As we have blogged previously, the time for the best deals on new cars may be now, with job-loss programs like GM Total Confidence adding appeal.

Learn more about how to buy a car in today’s market.

We will continue to monitor this fast-moving story, reporting here in the Cars blog and also updating advice and news on the Auto Crisis hub.

—Jeff Bartlett