General Motors is delaying a slew of vehicle update programs as factories sit idle and revenue is lost.
As the global outbreak of the novel coronavirus continues to rack up business casualties and put corporate plans on ice, yet another cost has come into focus: a series of GM mid-cycle vehicle updates. A letter GM sent to a handful of its parts suppliers, obtained by The Detroit News, asks those companies to pause tooling up and producing parts for a planned updated Chevrolet Silverado and GMC Sierra 1500.
Also affected by GM's decision to delay some update programs are the GMC Terrain and Chevrolet Equinox, Traverse, Bolt EV, Camaro, and apparently, the next high-performance Corvette Z06.
Of those, it's the delays to the Silverado and Sierra update programs that will hurt GM the most. The Chevrolet Silverado is GM's top seller across all vehicle categories, leading the automaker's charge against the best-selling Ford F-150. It's also a high-margin body-on-frame design in a segment that's taken on ever-greater significance as buyers the world over fall out of love with traditional sedans.
The delayed vehicle programs are evidence of the sort of economic ripple effect that can occur within an industry, as they followed GM's initial decision to shutter North American production facilities as the worldwide COVID-19 pandemic persists.
Just prior to this news breaking, in fact, the US president and his administration announced an extension of existing social-distancing policy through at least the end of April, which could keep GM's factories closed longer, putting a freeze on revenue. "All our development teams around the globe are looking for opportunities to conserve resources by adjusting program timing and deferring spending," a statement from GM read in part.
Employees are even seeing parts of their salaries deferred temporarily as GM attempts to keep cash on hand to weather the coronavirus economic storm. Yet, the Detroit News reports that many nearer-term programs, such as GM's full-size SUV redesigns, the Bolt Electric Utility Vehicle, and the GMC Hummer electric truck, will execute pretty much as planned.