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Full speed ahead: GM standing behind SUVs—and Janesville

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JAMES P. LEUTE
February 7, 2008
— General Motors officials expressed confidence Wednesday that sales will improve for full-size sport-utility vehicles built in Janesville; Arlington, Texas, and Silao, Mexico.

That should allow the three GM plants to continue building the big trucks for the foreseeable future, they said.


Mark LaNeve, GM North America vice president of vehicle sales, acknowledged the full-size SUV segment has been shrinking but said GM has continued to keep its market share at about 70 percent.


“We’ve been fortunate that we have new products in the market that are the best products—the Tahoe, Yukon, Suburban and Escalade,” LaNeve said in an interview with The Janesville Gazette at the Chicago Auto Show.


“We plan on vigorously defending that high-share position, and we’ve done it successfully so far.”


LaNeve said GM isn’t counting on significant growth in the segment, but added the automaker doesn’t expect sales to drop much lower.


Current and forecasted sales have prompted GM to schedule a production slowdown in Janesville starting in April, when the assembly line will drop from 52 jobs per hour to 44.


The slowdown could result in the layoff of 300 to 400 of the plant’s 2,500 workers, but that number won’t be determined until the results are in on an attrition program GM is expected to announce soon.


GM North America President Troy Clarke said he senses a pent-up demand that should make the latter six months of this year better than the first six months.


“A lot of people have been forecasting the demise of the full-size segment for a long time, but they’re still great products, and I think there’s still an opportunity to sell a whole bunch more,” Clarke told the Gazette.


“Everybody chooses to view the demand for these kinds of products in today’s reality, which is an auto market that’s been contracted for six quarters in a row, an auto market where the price of gas has been anything but stable.”


Clarke said GM is taking a longer view with its dominant position in the full-size SUV market.


Sales will bottom out, he predicted, and then grow.


When asked whether the Janesville plant will have a continued role in that growth, Clarke said now is not the time for rash decisions.


“Right now, we need those plants, and that’s what we’re going to continue scheduling,” he said, adding he doesn’t think GM or anyone else has a solid perspective on the segment’s true demand.


“We launched these things right into what you could call an automotive recession of sorts, but yet we still have a 70 percent market share that’s growing.


“The Janesville plant has a strong track record in helping us do that.”


When pressed further on the local plant’s future, Clarke said: “We have no announcements to make on capacity at this time. What we really want them to do is make a whole lot more of these great products.”


IF YOU GO

What: 2008 Chicago Auto Show, the 100th edition of the annual automotive exposition.


Where: McCormick Place, 2301 South Lake Shore Drive.


When: Today through Sunday, Feb. 17. Hours: 10 a.m. to 10 p.m. daily through Saturday, Feb. 16. 10 a.m. to 8 p.m. Sunday, Feb. 17.


Cost: $10 for adults, $5 for children ages 7 to 12 and adults older than 62, and free for children 6 and younger when accompanied by a paying adult.


Tuesday is Women’s Day at the auto show, and admission for women is half price. Automakers will present special programs dealing with women and vehicles.


Wednesday is the Chicago Auto Show Food Drive, and half-price admission will be granted those donating three cans of food.


More information: Visit www.chicagoautoshow.com.

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