Sharon Terlep The Detroit News Monday, May 12, 2008
The choice was painful but the mechanics at Roth Chevrolet saw no other option.
They needed rear axle parts to repair a customer's Chevy Suburban SUV. But General Motors Corp., hit by a parts shortage created by a strike at supplier American Axle & Manufacturing Holdings Inc., wasn't sending the few axles it had to the repair shop in rural Minnesota.
"We took the rear out of a brand-new, beautiful $58,000 Suburban," said sales manager Mark Pregler, a tone of disbelief still in his voice. "It was the only way to satisfy a need GM couldn't."
Dealers and customers are beginning to feel the pinch from the labor strife that's ensnared GM in recent months, from the 10-week-old United Auto Workers strike at American Axle to UAW walkouts at two critical GM factories.
GM says the strikes, while costly, have yet to broadly impact individual retail sales to customers, but frustration is mounting among the growing ranks of people who buy and sell vehicles GM can no longer build.
Among them is a dealer in Dearborn who is pretty sure that four GM crossovers he sold to customers last month were left stalled on an assembly line near Lansing when workers building them went on strike.
A Minnesota man still has no idea when he'll get the customized, top-of-the-line Chevy pickup he ordered in February as a retirement gift to himself.
And dealers say their days have become an unending scramble of Internet searches and calls to other shops to hunt down the vehicles their customers want.
The stories illustrate what analysts have been saying since American Axle workers walked off the job Feb. 26, crippling GM pickup truck and SUV factories throughout North America: Even if GM has a backlog of the highly profitable but slow-selling trucks the lost production will hurt the automaker's ability to provide dealers and customers with the variety and options they expect.
"It's not like GM is in a luxurious situation where they can afford to miss a small number of sales," said Tom Libby, senior director of industry analysis at Power Information Network, a unit of J.D. Power and Associates. "They need those products."
The American Axle strike cost GM $800 million in the first three months of the year and 100,000 vehicles of lost production, which GM said was mostly felt in fleet sales to commercial customers. The automaker on Thursday pledged up to $200 million to American Axle to help end that dispute. The money would be used pay for buyouts and early retirements and for cash incentives to get workers who stay to accept lower wages.
Matters only worsened for GM after the Axle strike began when the UAW, citing disputes over plant-level labor contracts, struck factories that build the popular Buick Enclave and GMC Acadia crossovers and the hot-selling Chevrolet Malibu sedan.
Workers at the Delta Township factory near Lansing, where GM builds its trio of crossovers, went on strike April 17. As of the end of last month, GM had a 38-day supply of Enclaves and 54 days' worth of Acadias. A 60-day-supply is considered ideal. The Kansas City, Kan., factory that builds the Malibu, GM's most competitive entry in years in the huge midsize car segment, went on strike May 5.
Negotiations at both GM factories were expected to continue throughout the weekend, but talks between the UAW and American Axle broke down late Friday after the company said it wanted to close a third plant in addition to two already agreed to by the union, UAW President Ron Gettelfinger said Saturday.
A resolution couldn't come soon enough for George Fowler.
"We have a lot of frustrated customers right now," said Fowler, general manager of Superior Buick Pontiac GMC Trucks in Dearborn. "Thank God most of our customers are GM employees. If they were regular retail customers, I can't imagine."
Fowler has been thrilled with the demand for the Lansing-built Enclave and Acadia. He recently took special orders for two of each. The customers don't
have to pay until they get the vehicles. When the crossovers didn't show, Fowler went online to check their status, and up popped a notice that said "broadcast" -- auto industry lingo for a vehicle that's on the assembly line getting built. That was the week of April 21, days after the UAW workers at the Lansing plant walked off the job. Two and a half weeks later, that status hasn't changed.
"We're trying not to be negative, but it's a real tough situation," he said. "There's just nothing anybody can do."
New retiree Steve DeGreeff has been waiting a month for what he calls his dream truck. DeGreeff, a customer at the Roth Chevy dealership in Willmar, Minn., picked out a Chevrolet Silverado pickup truck in the highest trim level GM offers. It comes with a black leather interior and some special add-ons, including chrome tow hooks.
DeGreeff placed his order Feb. 19, and planned to pick up the truck shortly after his April 1 retirement from Farmer's Union Insurance. But the dealer has no ides when his wheels will arrive.
"In 30 years, I have never had a new truck," he said. "I guess I'll have to wait a little longer."
Car buyers like DeGreeff are in the minority -- most skip the custom orders and buy off the lot. But even that's becoming a challenge.
Dealer Jerry Seiner, despite lackluster sales nationwide of big trucks and SUVs, still sells a good share of pickups in Salt Lake City. If he can't find a vehicle on his lot, he hits the phones and the Internet to try and track one down at a nearby dealership.
"We're satisfying the overwhelming number of customers," Seiner said. "But we don't have enough inventory."
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