GM to cut production if demand worsens exec
By Jui Chakravorty Das
DETROIT (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research) will make additional production cuts in the United States if demand for vehicles comes in much softer than expected, the automaker’s head of North American operations said on Sunday.
Higher gasoline prices combined with a weak housing market have raised concerns that the U.S. economy could tip into recession in 2008 and cause consumers to delay big-ticket purchases such as new vehicles.
“Certainly if demand is a lot less than what we are projecting in the first quarter, that would predicate some additional production cuts and we would step right up and make those,” Troy Clarke told reporters at the North American International Auto Show.
However, Clarke added that GM’s year-end inventory levels of 908,000 units seems appropriate.
“Everyone is concerned about the economy. But in some regards what we are seeing in credit, real estate, fuel prices — none of this stuff has snuck up on the public,” Clarke said.
Earlier in the day, GM CEO Rick Wagoner told reporters he estimated total U.S. industry sales to come in at 16.3 million to 16.5 million units in 2008.
Full-year 2007 sales dropped almost 3 percent to 16.14 million vehicles, the lowest since 1998.
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