Chevrolet and GMC to add crossovers in new way

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BY TIM HIGGINS
FREE PRESS BUSINESS WRITER

GM dealers have said they can't get enough of the Equinox and Terrain crossovers, which are made at GM's CAMI Automotive plant in Ingersoll, Ontario. The plant has been running at full capacity and does not have room to paint or to do final assembly of more Equinox vehicles.

But since taking charge as GM North America president in December, Mark Reuss has been working on ways to boost production of some of the automaker's hottest new vehicles to meet customer demand.

On Friday, GM said it will expand CAMI's body shop to produce extra Equinox bodies that will then be shipped about two hours to GM's Oshawa plant for paint and final assembly along with the Chevrolet Impala sedan.

"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," Reuss said in a statement.

GM executives have been wary of reopening a plant that locks the company into making extra vehicles way into the future even if demand falls off.

The solution announced Friday would seem to allow GM to use workers and space it already had at minimal added cost.

"This is really a good way to take care of it," Joe Langley, an industry analyst from CSM Worldwide, said. "This agreement is pretty cost-effective and they could easily get 50,000 to 60,000 units of ... production online pretty quickly," he said.

The plan calls for a third shift to be added at the Oshawa plant in October, bringing about 600 laid-off workers back to work. At CAMI, about 70 jobs will be created to handle the extra body-shop work, GM said.

"I cannot think of one plant right now in North America that is shipping bodies to another plant for assembly," said industry analyst Michelle Hill of Oliver Wyman.

Equinox and Terrain sales have been on fire. Sales of the Equinox, for example, were up 132% in February compared with a year ago. Its sales are already up 98% so far this year compared with last year, according to Autodata.

According to GM, the Equinox averaged 16 days to sell once at a dealer and the Terrain 13 days, compared with 54 days for the industry average.

In February, the Free Press reported that GM was considering unique solutions to boost production of hot new vehicles. Internal discussion this year at GM included the possibility of bringing some work to GM's Spring Hill, Tenn., plant, or, perhaps, a facility in Janesville, Wis.

Said Kim Carpenter, a GM spokeswoman, "Spring Hill and Janesville remain on standby status and are available if market demand and business conditions dictate a need."