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GM Outsourcing Van Production To AM General???

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On: Fri, Nov 27, 2015 at 5:20PM | By: Carl Malek

GM Outsourcing Van Production To AM General???

General Motors has a runaway hit on its hands with the Chevrolet Colorado and GMC Canyon midsize pickup trucks, and this strong success could possibly be forcing GM to rethink some of its internal operations, especially in regards to its commercial van division, if a letter released by the company to workers in Wentzville, Missouri, is to be believed.

The plan would involve GM subcontracting AM General for some of its van production, which would free up some floor space in its Wentzville Assembly Plant. The plan first surfaced in a letter sent to workers at the factory—a letter that was subsequently obtained by the folks at Automotive News. According to the letter,"this potential partnership would free up production capacity, and allow the organization to capitalize on our ability to build midsize trucks to further satisfy customer demand." That demand is for the Colorado and GMC Canyon has boomed since they were unveiled, and especially after the Colorado helped GM secure back-to-back Truck of the Year victories fromMotortrend. As a result GM, added a third shift and extra workers at the Wentzville plantearlier this year to keep up with the strong demand, which increased opportunities for weekend employment to build an extra 2,000 units a month.

It's important to note that this partnership would not take over-all van production; the move would be limited to production of the cutaway versions of the Chevrolet Express and GMC, which are used by . GM typically does not release figures for the cutaway versions, but it is known that they make up a third of all van production.

As for the Chevrolet Express and GMC Savanna, their fortunes have been bleaker—demand for the Chevrolet version fell 26.9 percent, while its GMC-badged twin has seen a drop of 2.6.6 percent—during the first 10 months of the year. Their troubles are largely due to their antiquated platform, electronics, and engine offerings which have caused both vans to fall behind rivals such as the Ford Transit and the Ram ProMaster. The twin's age is evident when one slips behind the wheel especially in regards to its driving dynamics and interior ergonomics. It is unknown when and if GM plans to update them, but for the moment they will solider into 2016 virtually unchanged.

This partnership is not the first time that AM General (the makers of the Humvee) has done on-the-side contract work for the automotive industry; the firm already usesg its Indiana-based factory to produce the Mercedes Benz R-Class for export to the Chinese market . Hopefully, this latest deal will help both sides keep their factories running, especially in the long term.


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