August 18, 2009 / 6:46 PM / 8 years ago

UPDATE 2-GM raises production as 'clunker' sales rise

 * Adds 60,000 vehicles to second-half production target
 * About 1,350 hourly workers in N.America back to work
 * Says additional output increases likely
(Adds executive comments, details on inventory, output)
 By Soyoung Kim
 DETROIT, Aug 18 (Reuters) - General Motors Co [GM.UL] said
on Tuesday it is increasing production in North America for the
second half of 2009 after a surge in sales ignited by the U.S.
government's "Cash for Clunkers" incentives program.
 The No. 1 U.S. carmaker said it would build 60,000 more
vehicles than planned for the third and fourth quarters by
increasing overtime and adding shifts at several North American
assembly plants.
 The move will bring about 1,350 hourly workers in the
United States and Canada back to assembly lines, GM said.
 With the actions, GM now plans to produce 535,000 vehicles
in the third quarter, and build at least 20 percent more
vehicles in the fourth quarter than the third.
 "We are extremely short on a number of products and our
dealers are clamoring for more vehicles in almost every
segment," GM U.S. sales chief Mark LaNeve said on a conference
call.
 "We're probably not done. We are probably going to continue
to ratchet up (production) in the next several months," LaNeve
said.
 GM is adding shifts at its Ontario, Canada, plant where it
builds the Chevy Equinox and the GMC Terrain SUVs, and its
Lordstown, Ohio, plant where the Chevy Cobalt car is produced.
 GM also said it expected to increase production of the
Chevy Camaro sports car, Buick LaCrosse sedan, Cadillac SRX
crossover and CTS Wagon based on consumer demand.
 GM joins other automakers including Ford Motor Co F.N in
raising output after the runaway success of the rebates
program, which offers payments of up to $4,500 to people who
trade in old gas guzzlers for fuel-efficient vehicles, helping
the companies reduce a glut of unsold cars and trucks.
 By late July, the "clunkers" program, inspired by similar
programs in Europe, had been drained of the $1 billion in its
original budget. Congress authorized another $2 billion to
extend the program.
 (Reporting by Soyoung Kim, editing by Leslie Gevirtz and
Matthew Lewis)


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