Rising demand for cars revs U.S. automakers
December’s sales figures give GM, Chrysler hope
DETROIT — The vital signs are improving for American automakers.
General Motors may reopen some shuttered factories because it can’t produce four of its vehicles fast enough to meet demand, and Chrysler is set to hire more engineers and product development workers.
While both companies still depend on government help, the moves are signs of increased confidence that the U.S. auto market bottomed out last year and will improve in 2010, even without a jolt from a cash for clunkers-style program.
GM factories making the Chevrolet Equinox, GMC Terrain and Cadillac SRX, all SUV-like crossovers, and the Buick LaCrosse sedan are at or near capacity, GM’s North American president, Mark Reuss, told reporters at the North American International Auto Show in Detroit.
The company will try to squeeze more production out of its existing plants first, Reuss said. He mentioned an idled factory in Spring Hill, Tenn., as a possibility for reopening. GM has closed 14 factories in the past two years.
The head of Chrysler, Sergio Marchionne, said his company does not have enough people to revamp its U.S. product line and soon will start hiring, probably beginning with temporary workers.
“We just don’t have the manpower,” he said. “We are going to increase heads.”
Michael Robinet, an auto industry analyst for the CSM Worldwide consulting firm near Detroit, said Chrysler’s former owners cut the engineering and design staffs too far for the company to compete.
Both need to add factory capacity to take advantage of hot-selling models because these days competitors can adapt quickly.
“You have to make hay in the sunshine,” he said. “These days, within a year or 18 months you can have competitors with products as good as yours, if not better.”
GM and Chrysler both entered and exited bankruptcy in 2009, when Americans bought the fewest cars of any year since 1982. In all, U.S. sales of cars and trucks totaled 10.4 million, roughly 700,000 of them with the help of the government’s cash for clunkers rebates.
Sales were down 21 percent for last year but up for December, giving the companies hope of gradual improvement this year.