According to General Motors Corp. dealers, vehicles are stacking up on their lots and they are reluctant to order more. This stance could do harm to GM’s ability to generate revenue during the worst sales market since the early 1980s, especially since the company has been struggling more than most during the economic troubles that are hitting worldwide.
GM’s factories are currently poised to increase production compared with the first quarter when the company implemented unheard production cuts. GM avoided collapse in December 2008 after receiving a $13.4 billion federal loan package. The company books revenue when vehicles leave the factory and not when they are sold to consumers, so they need dealers to keep ordering. However, some Saturn dealers are saying that they will not order soon.
GM anticipates producing 380,000 vehicles this quarter – a 57% decline from last year, due largely to the temporary closure of 20 plants across North America to cut costs and shave inventory in response to an industry wide sales slump. With fewer cars to move the after effects are being felt by car haulers and dealers as a knock-on effect.
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