Thursday, April 23, 2009

Meanwhile - Back at General Motors . . .
Most Plants to Shut Down All Summer

General Motors announced that it was planning on idling most of its US plants for up to 9 weeks this summer to adjust inventory. Total inventory as of April 1 was 122 days. Industry average now is about 83 days, and optimal is 60. Some models have much more inventory than the GM average.

The shutdown let's GM accomplish a lot more than clearing inventory. It will lessen the supplier shock if Chrysler goes Chapter 7 and leaves key suppliers unpaid. In general, it allows GM to work itself into shape in a post June 1 environment that will be drastically different than the reality today.

The downside is that the shutdown will deprive GM of inventory of some key 2010 models that either are currently in production or are on the cusp of production, such as the Chevrolet Camaro, the Chevrolet Equinox, and the Buick LaCrosse.

Now for the marginally relevant Youtube Video - it's Shutdown by the Beach Boys. A song which should be in the Guinness Book of World Records for the worst simplest saxophone solo in the rock era. Take it away, Mike Love

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