A rare problem for GM -- more customers than cars -- will be fixed by plans to boost production of the popular Chevrolet Equinox.
Here’s something General Motors hasn’t experienced much of in recent years: a shortage of some of its newest and hottest products. While the maker has often had to dump thousands of dollars on the hood to get sluggish-selling models, like the Chevrolet Cobalt, to move, dealers can’t keep up with demand for another Chevy product, the new Equinox crossover-utility vehicle.
As a result, GM today announced plans to increase production of both the Equinox and its CUV cousin, the GMC Terrain – a move that will result in the creation of nearly 700 jobs.
The decision to ramp up production of the two high-demand crossovers isn’t as easy as simply opening up a spigot. It requires a two-step process, starting with the expansion of the body shop at a GM factory in Ingersoll, Ontario. Once that’s completed, the CAMI plant will ship additional Equinox and Terrain bodies to a nearby assembly line in Oshawa, Ontario.
Adding a third shift in Oshawa will require GM to recall about 600 laid-off workers. At CAMI, the maker will require another 70 workers, some to be recalled, but others will be new hires.
“This plan for CAMI and Oshawa allows us to meet customer demand for hot products while avoiding a potential production overcapacity situation by creatively using our assets and facilities,” said Mark Reuss, president of GM North America, adding that, “This innovative approach enables us to ramp up in a timely and cost-effective way and highlights the importance of these plants and communities in our North American plans.”
The Equinox is one of the hottest models in GM’s line-up right now, with Autodata Corp. reporting its sales up 98% compared to year-ago levels.
But GM is struggling to meet demand for several other models, such as the hot pony car, the Chevrolet Camaro, and may have further production increases to announce.
Nonetheless, the maker’s overall share has slipped, since it emerged from bankruptcy last year, and is likely to settle in at somewhere around 18%, according to several senior company officials. That, of course, reflects the fact that GM eliminated half its North American brands after its run through Chapter 11, and will now depend on just four divisions to do its heavy lifting.
Chevy alone is expected to ultimately account for as much as 70% of GM’s U.S. sales, so delivering hot products, like Camaro and Equinox – and then meeting surging demand – will be critical.