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GM increasing production of highly profitable pickups and SUVs following coronavirus shutdowns

Trucks come off the assembly line at GM's Chevrolet Silverado and GMC Sierra pickup truck plant in Fort Wayne, Indiana, July 25, 2018. John Gress | Reuters

General Motors plans to significantly increase production at U.S. plants Monday as part of a gradual reopening of its North American operations following March shutdowns due to the coronavirus pandemic.

Most importantly, the company will return American plants that produce pickup trucks such as the Chevrolet Silverado to pre-coronavirus levels of three shifts. It also will begin reopening a plant in Texas on one shift that builds large SUVs such as the Chevrolet Silverado and Cadillac Escalade. All are highly profitable products for the company that are in low supply on dealer lots.

"Our comprehensive safety procedures are working well, and our suppliers have done a great job implementing their return-to-work strategies and safety playbooks," the company said in a statement late Thursday. "We are now in a position to increase production to meet strengthening customer demand and strong dealer demand."

Since restarting U.S. production on May 18, the automaker has slowly been increasing output at its North American plants. The slower pace is meant to allow for time for its suppliers to build inventory and employees to get accustomed to new safety protocols in the plants to lower the spread of Covid-19.

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Plants in Flint, Michigan; Fort Wayne, Indiana and Wentzville, Missouri, are expected to increase from one to three shifts on Monday. Flint and Fort Wayne produce the Chevrolet Silverado and GMC Sierra pickups, which were expected to increase production this week but were delayed due to a parts shortage. Wentzville produces midsize pickups such as the Chevrolet Colorado and large vans.

Other plants that produce cars and crossovers for the automaker also are adding shifts or reopening next week, according to the company.

With the increases in production, the vast majority of GM's 48,000 hourly workers will be back to work as of next week.

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GM spokesman Jim Cain confirmed Friday some employees have tested positive for Covid-19. He declined to comment on the exact number of positive cases and how many employees have been tested.

"The circumstances around each case were different but none required production to be paused," Cain said in an email. "We are not providing statistics on Covid testing."

GM's crosstown rival, Ford Motor, has paused production or sent workers home after employees tested positive for Covid-19 at least four times since restarting production May 18.

Spokespeople for Ford and Fiat Chrysler did not immediately respond for comment early Friday regarding updates to reopening their production plants. All three of the automakers started reopening assembly plants on May 18.

CNBC

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