AM General May Begin Making GM Vans
Although the deal has yet to be confirmed, it’s possible that General Motors plans to outsource some production of commercial vans to AM General. This would enable the automaker to manufacture more GMC and Chevrolet pickup trucks in a Missouri factory known as the Wentzville Assembly Plant. The growing popularity of the medium-sized GMC Canyon and Chevy Colorado appears to have brought about this decision. General Motors reports rising sales of these vehicles even as the demand for commercial vans falls.
When GM began selling the newest versions of the Canyon and Colorado, it didn’t take long for sales to skyrocket. Praise from the automotive media has helped to boost demand. For example, Motor Trend awarded the Colorado its top pickup truck award for two years in a row. General Motors reacted to rising sales by raising production during Saturday and Sunday in its Missouri plant. This increased the monthly output by about 2,000 trucks in 2015. A year earlier, the company had instituted another shift and hired more assembly staff.
Meanwhile, sales of GM commercial vans have dropped during 2015. In comparison to the previous year, customers bought about 27 percent fewer GMC Savana and Chevrolet Express vehicles. Approximately one out of three vans are cutaway models. Factories initially produce these units without cargo compartments, so they can be customized for a wide range of purposes. While it recognizes that commercial van sales remain an important source of income for many General Motors dealers, GM wants to boost pickup truck production by using some of the company’s van manufacturing equipment and staff for this purpose.
The potential for a deal with AM General was revealed by a company announcement sent to Wentzville Assembly Plant workers. It stated that GM could sign a contract that would outsource the production of cutaway GM Vans (GMC Savana and Chevy Express) to AMG plants. This solution enables General Motors to produce more Colorado and Canyon pickup trucks without constructing new factories or expanding current facilities. It provides a quick way to meet the rising demand for these popular trucks while maintaining an adequate supply of cargo vans for businesses and other organizations.
Although it produces a variety of autos, AM General is primarily known as the manufacturer of the Hummer and Humvee. It generally makes durable and relatively high-end vehicles. Although the civilian Hummer fell out of favor in recent years, the Humvee remains popular for military applications. This company also manufactures some Mercedes-Benz cars in a U.S. factory; these autos are exported to Asia. The practice of outsourcing vehicle production to a different automaker isn’t something new. For instance, Mitsubishi has manufactured certain Dodge cars from time to time.