GM delays truck plant restarts due to Mexico

Detroit’s automakers have seen stocks of full-size pickups shrink despite the pandemic slowdown in sales. The delay could hurt GM dealers.

Days after relaunching production in the U.S. and Canada, General Motors now intends to delay the restart of second shifts at three of its North American truck plants, despite growing shortages of high-profit models like the Chevrolet Silverado and GMC Sierra.

The delay, which affects truck plants in Michigan, Indiana and Mexico, is being blamed on shortages of Mexican-made parts. An industry source subsequently told TheDetroitBureau.com that it is quite likely other manufacturers besides GM have or will shortly be impacted.

Mexico has become a potential bottleneck for the North American industry as a whole, as it is a primary source for numerous parts and components critical to factories across the continent, especially wiring harnesses. Government officials are only just allowing manufacturers to reopen south of the border – and only then if they can demonstrate an acceptable plan to prevent new COVID-19 infections.

(GM moving to reopen plants in Mexico.)

The three plants impacted by the delay are based in Lansing, Michigan, Fort Wayne, Indiana, and Silao, Mexico. All produce full-size GM trucks.

GM delays restart of truck plants

General Motors has been forced to delay the restart of second shifts at three of its plants, including the Fort Wayne, Indiana plant, due to parts shortages.

The delay could create headaches for both General Motors and its dealers. While U.S. new vehicle sales tumbled around 40% in March compared to the year earlier, and nearly 50% in April, pickup truck demand remained unexpectedly strong. On the whole, full-size models were off by less than 15% for the two-month period, according to data from J.D. Power’s PIN network which tracks dealer sales in real time.

As a result, inventories have been shrinking to well below industry norms, with some popular truck packages facing spot shortages in pickup-centric markets like Texas, according to Power. The situation is expected to be further exacerbated by the Memorial Day holiday. The long weekend traditionally serves as one of the strongest periods for vehicle sales and this year is getting a boost from record price cuts, rebates and other incentives.

(GM says no new COVID-19 cases, expects U.S. production back to normal in four weeks.)

“We continue to plan to ramp up production in a gradual cadence but we don’t share specific production plans and schedules,” GM said in a statement sent to TheDetroitBureau.com.

A company insider, however, said the carmaker hopes to get production back on track within the company week – if the parts plants are able to get their own operations in gear.

New Silverado sales haven’t been hit as hard as other vehicles during the pandemic.

Automakers like GM rely heavily on outside suppliers for the vast majority of the parts and components used on their assembly lines. Under NAFTA, a significant amount of work went to Mexico, especially for low-cost and high-labor goods like plastic trim pieces and wiring harnesses.

Sources would not discuss what specific part or parts caused the delay at GM but did note that supplier plants in three Mexican states were involved. Those states delayed allowing manufacturers to reopen beyond what was authorized by the country’s federal authorities.

(GM moving forward with preparations to restart plants.)

TheDetroitBureau.com also was advised “this will affect other manufacturers.” We have reached out to several to see if they are, in fact, being impacted. So far, the only one to respond was Fiat Chrysler, a spokesman saying, “I am not aware it is affecting any of our plants.”

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