GM Is Pausing Silverado, Sierra 1500 Truck Production to Limit Supply on Dealer Lots
GM has gone from scrambling to build enough trucks to pausing production for two weeks this spring.
Finding the vehicle you want at a local dealer isn't as easy as it once was. Automakers started prioritizing customer orders over stocking lots and showrooms, which breeds the positive result of getting your preferred spec and the negative result of waiting months or more for its arrival. This was crucial when manufacturers couldn't keep production on par with demand, though we're now seeing something way different. General Motors is idling its truck plant in Fort Wayne, Indiana, so dealer lots don't get too full.
As The Detroit News originally reported, the facility that builds the Chevrolet Silverado and GMC Sierra 1500 will take a two-week break starting March 27. GM claims it's taking this measure to maintain "optimal" delivery levels, alluding to comments made by the company's CFO Paul Jacobson during its full-year 2022 earnings call. Jacobson indicated that GM will look to end 2023 with "50 to 60 days of total dealer inventory," which is "down 20 to 30 days from mid-2019."
You'd be right in thinking this is the opposite of what's been going on for the past two years. Whereas automakers have adapted their processes to build vehicles as completely as possible and park them until they're finished, GM is now pushing pause altogether on the production of its two most popular light-duty trucks. When I reached out to the automaker for comment, a spokesperson from GM sent over the same statement that was provided to The Detroit News and others:
"Our production is up over the past month while demand remains fairly consistent, leading to an increase in inventory. Therefore, as we stated on our earnings call, we are going to proactively manage inventory levels, including plant downtime. These kinds of actions were assumed in our 2023 financial guidance."
It makes sense that automakers and dealers don't want new vehicles sitting on lots for too long. Even still, it's strange to see a manufacturer having the option to willingly halt production, not to mention them actually taking it. This might not be unprecedented, but coming off the tail end of a global parts supply crisis, it certainly feels that way.
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