Summer auto shutdowns shrink to feed truck boom – Detroit Free Press
You’ve heard of the staycation. Next month, tens of thousands of U.S. autoworkers will be observing a stay-at-work-cation as demand for pickups, large SUVs and crossovers shows little sign of abating.
“We are working straight through the month of July and currently we have five Saturdays scheduled through the summer,” said Brian Hartman, president of UAW Local 2209, which represents about 4,000 workers at the GM Truck plant in Ft. Wayne, Ind. “We have the capacity to produce 505 trucks per day, and we’re right at the brink of that most days.”
For years, General Motors, Ford and Fiat Chrysler pushed and eventually convinced the UAW to have its members all take vacation during the first two weeks of July. The companies could save on utilities, shrink inventories and employ a small crew of skilled trades workers to install new tooling for the next model year.
That’s back when GM and Ford each had four or more U.S. assembly plants churning out large pickup trucks. Now they have half as many, if that.
Tim Shoup, a worker in the paint shop at GM’s Flint truck plant, said he’s going to be off the first week of July, but production resumes with the third shift on July 10.
“They’ve also added a Saturday in July, but they’ve said we may be working 42 Saturdays over the next year,” Shoup said.
In the big picture, this is good news. Both management and the UAW benefit because bonuses and profit-sharing, although not paid until next year, are tied to profitability in North America.
In the near-term, however, there’s not a big income gain. The UAW has agreed to more flexible work schedules. Three shifts, which most of the pickup truck and SUV plants are running, enable around-the-clock production. That also minimizes overtime for individual workers, although Saturday work can earn the overtime premium in some cases.
Under UAW contracts, workers are able to take their allotted vacation weeks at other times of the year and those who are able to take one or two weeks in July will be paid.
Full-size pickup trucks are selling for an average of more than $40,000 and large SUVs for about $60,000 each.
In a world where GM is promising Wall Street it will make a pretax profit margin of 10% or better, these vehicles are the Steph Currys and LeBron Jameses of the Detroit Three’s lineups. They are much more dependent on those segments than their Asian and European competitors, and they don’t want the scoring streak to end.
GM sold about 62,700 Chevrolet Silverados and GMC Sierras in May. Not bad, but when compared with the year-earlier numbers that was a 13% decline for Silverado and 7% for Sierra. The combined total fell short of the 67,412 F-Series pickups Ford sold.
So this month, Chevrolet began offering up to $8,250 in rebates, or discounted financing, on Silverado. It also unleashed an aggressive ad campaign attacking the durability of Ford’s aluminum-body F-150.
It’s not just about pickups.
The Detroit-Hamtramck and Delta Township plant near Lansing also will not take a break other than for July 4. About 2,700 workers at Detroit-Hamtramck are in the middle of launching the Cadillac CT6 and Buick LaCrosse, as well as making the Chevrolet Volt. Workers at Delta Township make the Chevrolet Traverse and Buick Enclave.
Other plants will have one week off.
“We can’t build them fast enough,” said Johnny Pruitte, president of UAW Local 276 in Arlington, Texas, where nearly 4,400 workers make Cadillac Escalades, Chevrolet Tahoes, Suburbans and GMC Yukons.
GM Arlington workers will be off from July 3 through late evening on July 10.
“Everybody’s tired. We’ve been working these long hours for months and it’s hot down here,” Pruitte said. “So at least we get that one week off.”
GM isn’t the only automaker tweaking July schedules to boost production.
Fiat Chrysler will run the Jefferson North assembly plant through the entire month to get more Jeep Grand Cherokee and Dodge Durango SUVs to dealers.
Workers at the Warren truck plant, which makes the Ram 1500 pickup, will have two weeks off, but their counterparts at the Saltillo, Mexico, plant, which also makes the Ram 1500, 2500 and 3500, will be on the job without a break.
FCA’s Mack Avenue and Trenton engine plants will not have a July break, nor will the company’s other Mexico assembly plant in Toluca (Dodge Journey and Fiat 500), according to company spokeswoman Jodi Tinson.
The Belvidere, Ill., assembly plant where FCA produces the Jeep Compass and Patriot, and the Toledo Assembly complex (Jeep Cherokee and Wrangler) will be idled the week of July 18. The Toledo Machining facility in Perrysburg, Ohio, will be off the week of July 25.
At Ford, four assembly plants, including two in Louisville, one in Chicago and one in Oakville, Ontario, will be idle the week of July 4 for building maintenance and retooling, but will be producing the week of July 11.
The Kentucky Truck plant in Louisville is launching production of the new F-Series Super Duty pickup and the Expedition full-size SUV. The other Louisville plant makes the Ford Escape and Lincoln MKC compact utility models. Workers in Chicago assemble the Ford Taurus, Explorer and Lincoln MKS.
In Oakville, demand for the Edge crossover has been strong through the first five months of 2016.
Sales of all Ford SUVs are running 9% ahead of last year’s pace through May.
Contact Greg Gardner: 313-222-8762 or firstname.lastname@example.org. Follow him on Twitter @GregGardner12.