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June 19, 2003

USA: GM plays down speculation assembly plants are for the chop – report

A top General Motors executive on Wednesday played down speculation that the vehicle maker will close some of its less-efficient assembly plants in North America. "If what we're really looking at is the beginning of the next growth boom in our automotive market...then we probably need every piece of assembly capacity that we can get," Troy Clarke, GM's group vice president for manufacturing and labour relations, told Reuters.

By bcusack

A top General Motors executive on Wednesday played down speculation that the vehicle maker will close some of its less-efficient assembly plants in North America.

“If what we’re really looking at is the beginning of the next growth boom in our automotive market…then we probably need every piece of assembly capacity that we can get,” Troy Clarke, GM’s group vice president for manufacturing and labour relations, told Reuters.

GM is on track to increase its plant productivity to 100% by mid-decade from 90% currently, Clarke reportedly said.

According to Reuters, some analysts have speculated that one way GM could increase its capacity utilisation would be to close some plants, such as its Baltimore, Maryland, facility which makes vans.

Clarke noted that its current contract with the United Auto Workers union, which expires in September, impedes car makers from closing US plants, Reuters said.

“The subject of plant closures is one that, during the course of the current UAW agreement, that’s not a capability that we have,” he reportedly said during a conference call discussing GM’s results in the Harbour Report on factory efficiency. “We’re not looking to push that at this particular point in time.”

Reuters said that, according to the Harbour Report, GM had at least one plant that had capacity utilisation last year of 37%, the worst among major car makers in North America. Despite some poorly peforming plants, GM’s overall plant productivity increased last year, and GM narrowed the gap with Japanese car makers.

According to Reuters, Clarke said that GM will add third shifts to some of its assembly plants. At other facilities that produce vehicles that don’t sell as well, the car maker will reduce the line rate, cutting the number of vehicles it makes per day.

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