In September 2017, General Motors will be forced to lay off a large number of workers at its Kansas City, Kansas assembly plant where the Chevrolet Malibu is built.
Only two days ago we learned General Motors would stretch the Fairfax assembly plant’s summer shutdown by an additional three weeks — from two to five in 2017 — because of excessive Malibu inventory. But as GM seeks to maintain a more reasonable grip on incentives than in the past, the only remaining way of reducing an inventory glut is to stop building so many cars.
Unfortunately for some of GM’s Kansas employees, the announcement of a temporary shutdown — the third this year according to the Kansas City Business Journal — will be an insufficient means of reducing stock. The Kansas City Star reports the number of shifts at the plant will be reduced to two in late September.
After Chevrolet’s U.S. midsize sales rapidly elevated to a 36-year high in calendar year 2016 during the ninth-generation Malibu’s launch, volume has declined hard and fast in early 2017.
Through the first five months of 2017, Malibu sales are down 30 percent, falling nearly three times faster than the segment overall. Already this year, GM has lost more than 31,000 Malibu sales. Heading into June, Automotive News reported a 67-day supply of Malibus, down significantly from 91 days one month earlier.
“People are choosing crossovers and trucks over passenger cars,” GM spokesperson Mary Padilla told the Kansas City Star. “People are changing the kind of car they want to drive.” Indeed, passenger car market share — at 41 percent in early 2016 — is down four points to 37 percent through the first five months of 2017. Meanwhile, thanks to a 7-percent year-over-year sales jump, the U.S. SUV/crossover sector has seen its share of the overall industry’s volume rise to 41 percent from 38 percent in 2016’s first five months, essentially swapping positions with the passenger car market.
GM’s Fairfax facility was building more than just Malibus until last year. But when production of the second-generation Buick LaCrosse came to an end, the third-generation Buick LaCrosse’s production moved to Hamtramck, Michigan.
“It’s not a good place for us to be to have just the one product,” Vicky Hale, president of United Auto Workers Local 31, told the Kansas City Star. “Most plants have two or three products.”
Of all the locations in which General Motors builds vehicles in North America, only Bowling Green, Kentucky (Corvette); Lordstown, Ohio (Cruze); and the Malibu’s Kansas City factory serve a single nameplate.
[Images: General Motors]
Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.