20 August 2009

Clunkers plan boosts GM

Cash for clunkers is helping to boost beleaguered General Motors automobile production.

Just some of the benefits GM is enjoying are an extra day of work at the Lordstown, Ohio, assembly plant and increased hours at a factory in Orion Township, Mich.

The Lordstown plant, which makes the Chevrolet Cobalt and Pontiac G5, is now running at one shift for 10 hours per day from Monday through Thursday, but the company will add the next two Fridays to the schedule.

It was unclear what the addition would be at the Orion plant, which makes the Chevrolet Malibu and Pontiac G6 midsize sedans.

The Malibu and Cobalt have been popular with people trading in older less-efficient models under the clunkers program, which offers up to $4,500 to people to scrap vehicles with gas mileage of 18 mpg or less.

At the end of July, GM had 70 days worth of Cobalts on dealer lots, while it had 55 days worth of Malibus, according to Ward’s AutoInfoBank. A 60-day supply is ideal to maintain a good selection for buyers but not have too many cars.

But since the clunkers program began in late July, dealers have reported spot shortages of both vehicles.

The Cobalt, GM’s highest-mileage car at up to 37 mpg on the highway, once was among the top 10 vehicles on the “cash for clunkers” purchase list. But dealers said shortages have bumped it from the top 10 list.

As of last week, the Toyota Corolla small car was the top new vehicle purchased by people trading in clunkers, followed by the Honda Civic and Ford Focus compacts. Toyota’s Camry was fourth, while its gas-electric hybrid Prius was fifth, according to the government.

For related information, go to www.isa.org/productivity.