GM adds new shift, increases pickup production by 100,000

May 10, 2002
General Motors Corp. said it will add a third shift of workers at its Pontiac, Michigan, pickup plant to boost production of its hot-selling trucks, which
General Motors Corp. said it will add a third shift of workers at its Pontiac, Michigan, pickup plant to boost production of its hot-selling trucks, which have taken market share from rival Ford Motor Co. this year. The new shift, beginning this fall, will allow GM to build an additional 20,000 to 25,000 Chevrolet Silverado and GMC Sierra pickup trucks this year, and an extra 100,000 on an annual basis, GM spokesman Dan Flores said. Sales of GM's full-size pickup trucks, which have an estimated profit margin of $10,000 each, are flat so far this year compared with last year's strong levels. However, GM will come out with refreshed versions of the pickup trucks this fall."I think in the near-term, it's the right decision," said Rod Lache, an analyst with Deutsche Banc Alex. Brown. "In the longer term, it may have negative implications. The risk is we see rising overcapacity in this category. I don't think they're (the auto industry) going to maintain the current level of profit as they beat each other up for share." The additional shift is expected to add another 800 to 1,000 jobs to the plant. GM eliminated the third shift in February last year when automotive sales slowed as the U.S. economy weakened.The jobs will be filled from current GM employees on layoff status, and no new workers will be hired, GM said. The Pontiac assembly plant employs about 2,400 hourly and 215 salaried employees.Earlier this week, GM said it would add a third shift of workers at its Oshawa, Ontario, car assembly plant to boost production of the popular Chevrolet Impala large sedan.The increased pickup truck and Impala production could help GM's Chevrolet brand gain on the Ford brand. Chevrolet passed Ford in U.S. sales in February for the first time in more than a decade, but slipped back in March, due in part to tight inventories. For the first four months this year, the Ford brand led Chevrolet in U.S. sales, with 947,127 to 882,029.Most of GM's North American assembly plants have been running on overtime this year due to the strong pace of U.S. vehicle sales, spurred by the economy recovery, high consumer incentives and low interest rates.