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General Motors Co GM will reportedly pause production at its Fort Wayne Truck Assembly plant in Indiana, starting March 27 for the second time in a span of 12 months. All production will be halted for two weeks.
What happened: For two weeks, production at the Indiana plant will be idled in hopes of balancing the inventory which is presently outweighing demand, Reuters reported on Thursday.
While production increased over the last month, demand remained the same, leading to a surge in inventory, the report said.
“Fort Wayne Assembly production will be down for two weeks beginning March 27 in an effort to maintain optimal inventory levels with our dealerships,” GM spokesperson Dan Flores told The Detroit News.
Employees at Fort Wayne Assembly build more than 1300 trucks each day, according to the GM website.
General Motors did not immediately respond to Benzinga’s request for comment.
See Also: General Motors Outperforms, Raises 2023 Outlook: Analysts Weigh In
Why is this important: Until recently, automakers including Ford, Nissan and Stellantis were struggling with backlogs due to shortages of parts, particularly in EV production.
Semiconductor chip shortage rose due to the COVID-19 pandemic and subsequent lockdowns, particularly in China. The Fort Wayne plant was halted in April last year owing to semiconductor shortages, which have been plaguing U.S. automakers for the last two years.
The proposed idling marks a shift from this industry dynamic; inventory is now exceeding demand, arising due to increased vehicle costs and interest rates.
Last Month, General Motors said it expects core auto operations to perform at a consistently strong level in 2023, with full-year net income attributable to shareholders of $8.7 billion-$10.1 billion.
Price Action: Shares in General Motors fell 4% to $39.24 on Thursday, according to data from Benzinga Pro.
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Image and article originally from www.benzinga.com. Read the original article here.