Friday, July 3, 2015

GM plant meets high SUV demand

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(MCT) -- ARLINGTON, Texas - Silence seldom settles on the General Motors Assembly Plant here.

Already operating around the clock during the week, the plant also ran three Saturdays last month as workers try to meet the demand for GM's 2015 model full-size SUVs.

In a rare move, the Arlington plant even ran overtime on a recent Sunday, asking for volunteers to work. The plant got enough workers to schedule one shift, plant spokeswoman Donna McLallen said.

The Arlington plant remains a bright spot for GM, which has been beset by millions of recalls and a national controversy over defective ignition switches on old compacts linked to at least 13 deaths - none of which affects Arlington's SUVs.

The Arlington plant is GM's only full-size SUV factory now, and the 4,500 workers there build the Tahoe, Suburban, GMC Yukon, Yukon XL and Cadillac Escalade.

Although big truck-based SUVs don't sell in the volumes they once did, those still left in the segment tend to be loyal repeat buyers.

And GM's full-size SUVs dominate the segment, with a 75 percent share.

In April, sales of the Yukon shot up a startling 136 percent from the same month a year ago, and they were up 42.2 percent in May, according to Automotive News.

The Escalade, the last vehicle to be added to Arlington's build mix, reported a modest 2.6 percent sales increase in May, though business was slowed by an air bag recall.

"We haven't seen these kinds of (sales) numbers since early 2008," said Mark Clawson, marketing manager for the Chevrolet Tahoe and Suburban. "We're turning Suburbans in 10 days and Tahoes in 17."

Sales of the Tahoe, meanwhile, were flat last month, partly because dealers couldn't get enough loaded, highly profitable LTZ models to meet demand.

"Buyers want the high-end models," said Tom Durant, owner of Classic Chevrolet in Grapevine, Texas, the top-selling Chevy store in the U.S. "The low-end models just aren't selling as well."

Plant manager Paul Graham isn't surprised by the demand that keeps his factory humming deep into the night.

"The vehicles look great, drive great and have more features," Graham said. "We knew there would be pretty good demand for them."

They are the first thoroughly restyled big SUVs from GM since 2006.

"We've got lots of loyal Tahoe and Suburban owners out there who have been waiting for these new trucks," said Ray Huffines, who owns nine Dallas-area dealerships.

Just about everything at the 60-year-old Arlington plant has changed since it began building the last generation of full-size SUVs eight years ago.

Last year, the plant added a third shift and a $200 million stamping facility. The facility, a first for the Arlington plant, will provide most of the metal body panels that the plant uses to assemble its SUVs.

The panels were previously shipped in from GM stamping facilities in the Midwest.

In addition to all the changes at the plant, workers are assembling vehicles with new bodies and engines, plus much-improved interiors with more content and electronic features.

Despite those complications, Graham says production continues to run "pretty smoothly."

Earlier this year, several publications - including Automotive News - reported that the Arlington plant had experienced periodic shortages of some parts.

The industry magazine also quoted high-level GM executives as saying that the launch of the full-size SUVs had been postponed by a couple of months to avoid bumping up against the introduction of GM's new pickups.

Graham mostly dismissed those reports, saying "everything is fine."

The plant began building salable Tahoes and Yukons in March, adding the Escalade in April as planned, Graham said.

"We've had people involved in building early (practice) vehicles for more than a year," he said.

The assembly-line speed at the plant is up to the rate it ran with the previous generation of SUVs.

Moreover, all three of the giant metal presses at the stamping facility are operating, producing some of the SUVs' body pieces as they ease up to speed.

"We're getting roofs and hoods from them, as well as other pieces," Graham said. "Normally, you expect the (stamping facility) to do most of the exterior body panels, and we're getting there."

Pieces that can't yet be supplied by the new stamping facility continue to be shipped in from the Midwest.

Although the Arlington plant builds 1,200 full-size SUVs a day - worth an estimated $48 million in revenue to GM - it could be asked to do more.

"I tend to think this demand cycle will last," said Clawson, the marketing manager for Tahoe and Suburban. "With all the pent-up demand and these fantastic new products, I think sales will stay high for a while."

The Dallas Morning News
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