General Motors is kicking a bad habit.
The automaker said it will idle its full-size pickup plant near Fort Wayne, Ind., starting March 27 for two weeks to avoid an oversupply of trucks in its most popular segment.
Pausing production at a full-size pickup plant to avoid an oversupply would have sounded nonsensical a year ago when inventory was depleted. Today, it shows discipline.
If others follow GM’s lead, the U.S. auto industry may go through a profound change in how it operates.
Over the past few years, automakers have been forced to idle production because of supply chain woes and COVID-19. In doing so, they prioritized high-profile electric vehicles and those that delivered the most marginal profit. Incentives and other marketing costs collapsed. Automakers and dealers far and wide reported record earnings, and the manufacturers insisted that even when parts supply normalized, they would manage inventory levels to avoid profit-sapping oversupply.
For GM, that time has finally come.
The idling of the pickup plant is not a good-news economic signal, but it doesn’t necessarily mean that demand has gone soft. GM said its production increased while demand remained consistent — though apparently at levels below the company’s capacity. The automaker is trying to maintain the right inventory levels at its dealerships to support high prices and profitability.
Vehicle supply and demand have always been a delicate balance. Before the pandemic, automakers often ran plants at full speed until dealership lots overflowed. Then they halted production to manage supply and ramped up costly incentives.
