The Finch Formerly Known As Gold

8 December 2004

Tanks for nothing

In case you thought that sport-utility vehicles were taking over the world, be advised that they're taking a break: the General Motors Oklahoma City Assembly facility, which produces seven-passenger Chevrolet TrailBlazers and its GMC and Isuzu brethren, will temporarily cut about 250 to 300 jobs next month in an effort to balance production and inventory.

The GMC Envoy XUV, produced only in Oklahoma City, is not selling well despite its sliding roof over the cargo area, a feature last seen in mid-1960s Studebaker wagons.

This is perhaps an indication that Detroit really didn't expect that truck sales might drop in the wake of two-dollar-plus gas. I'm not persuaded that the SUV boom is over, but I'm fairly sure that it's past its peak.

Posted at 8:04 AM to Driver's Seat

Yes but just watch . . it will be like custom vans and hang on forever :( I for one am so tired of seemingly every vehicle on the road being a high profile variety! :(

Posted by: ms7168 at 9:35 AM on 8 December 2004

I don't know how "temporary" those jobs cuts will be. The number of GM's OKC Assembly employees is about half of those at it's peak of over 6,000, when they were producing "bread and butter" Chevrolets and Ponitacs. Building a niche large SUV was a risky decision, whether the price of gas is $1.50 or $2. Especially when folks can get a slightly smaller version for less money. Those that want a large SUV tend to like a full size Yukon. It's just that there is so much profit in trucks, the ROI is too attractive for GM to ignore, so they flood the market and hope for the best.

One advantage for the future of the OKC facility is that it is one of GM's more flexible plants. It is able to adapt to product changes quickly and efficiently. Also the plant has always competed well in quality among all North American auto plants.

Another thing to consider is that the bulk of the workforce is approaching 30 years seniority in 2009. A disadvantage if GM wanted to replace them all. An advantage if they want to experiment with assembling vehicles having parts vendors themselves install their own parts. And also taking on the warranty costs.

Posted by: MikeH at 10:22 AM on 8 December 2004