J.P. Morgan Asset Management global strategist David Lebovitz discusses the market’s reaction to geopolitical tensions and energy price volatility on The Claman Countdown.
General Motors is planning to ramp up production of heavy-duty pickup trucks in Michigan this summer amid strong demand for gas-powered pickups despite elevated fuel prices.
GM is planning to operate its Flint Assembly plant six days a week, up from five, starting in June to produce more trucks to meet demand.
The facility produces the heavy-duty versions of the Chevrolet Silverado and GMC Sierra pickups, known as the 2500 and 3500.
The Wall Street Journal reported that the Flint Assembly plant’s workers will be mandated into overtime hours to cover the additional day of production. About 4,200 hourly workers are employed at the facility.
GM TAKES $7B HIT AFTER SHIFTING EV STRATEGY DUE TO SLOWING DEMAND
GM is increasing production of its Chevrolet Silverado and GMC Sierra heavy-duty pickups. (David Paul Morris/Bloomberg via Getty Images)
GM’s plan to increase domestic production comes as it and other automakers are moving to increase production at U.S. facilities to avoid the Trump administration’s tariffs on imported vehicles, including those made at automakers’ facilities in Canada.
The Journal reported that GM’s heavy-duty Silverado is also made at the company’s Oshawa Assembly plant in Ontario, Canada, which lost a third shift of production in late January – a move that the Canadian autoworkers union blamed on tariffs.
GM TAKES $1.6B FINANCIAL HIT AS EV TAX CREDIT CHANGES FORCE STRATEGY OVERHAUL
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | GENERAL MOTORS CO. | 75.53 | +1.03 | +1.38% |
Consumer demand for pickup trucks and SUVs has remained strong despite the recent rise in fuel prices amid the supply disruptions stemming from the Iran war inhibiting oil shipments from the Middle East through the Strait of Hormuz.
Last month, GM CFO Paul Jacobson noted that historically, consumers don’t start to reconsider their preference for pickups or SUVs that have less economical gas mileage until oil and gas prices have been elevated for an extended period of time.
THE $10,000 CAR LOAN TAX DEDUCTION: HERE’S WHO QUALIFIES AND HOW TO CLAIM IT
The signage on the outside of General Motors Co. Flint Assembly on June 12, 2019, in Flint, Michigan. – GM announced the second major expansion of its full-size pickup production capacity this year: with a $150 million investment at Flint Assembly to (Jeff Kowalsky/AFP via Getty Images)
“Usually it takes four to six months of sustained high oil prices before people start to think, ‘Maybe I should go for less mileage, or maybe I should buy down,’ I don’t think we see that,” Jacobson said at a Bank of America conference.
Gas prices have surged in recent weeks as oil prices were jolted higher by supply disruptions related to the war in Iran.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The national average price for a gallon of regular gasoline was $4.06 on Wednesday, up over 36% from $2.98 a month ago. Diesel is up to an average price of $5.49 a gallon from $3.76 a month ago, an increase of nearly 46%.
Reuters contributed to this report.
