© Reuters. FILE PHOTO: U.S. Secretary of Energy Jennifer Granholm inspects an electric Cadillac LYRIQ 450E while visiting the Washington Auto Show in Washington, U.S., January 25, 2023. REUTERS/Jonathan Ernst/File Photo

By Paul Lienert

DETROIT (Reuters) – General Motors (NYSE:) faces greater risk than rivals Ford Motor (NYSE:) and Stellantis (NYSE:) of electric vehicle production being disrupted by a prolonged UAW strike – although some analysts say that this could also be a buying advantage Time to fix annoying problems.

While Ford and Stellantis are unveiling several redesigned combustion engine models this fall, GM’s immediate focus is on electric vehicles – with plans to launch or ramp up production of at least five new models. According to researcher GlobalData, they include all-electric companions to the full-size Chevrolet Silverado and GMC Sierra pickups.

GM has struggled for much of the year to offset problems in battery manufacturing and electric vehicle supply chain and logistics, including delivering its Cadillac Lyriq and GMC Hummer electric vehicles to dealers.

The company delivered just 1,348 Lyriqs and 47 Hummers in the second quarter, well below expectations, due in part to problems with battery module assembly.

Chief Executive Mary Barra told analysts in July, “Our automation equipment supplier has been struggling with supply issues,” leading to a shortage that forced the automaker to assemble battery modules by hand.

In July, GM Chief Executive Rory Harvey said the company was working to resolve supply issues at dealers, noting that Lyriq and Hummer “came to market in very limited quantities (but) we are gaining momentum.”

According to Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a prolonged strike could help GM address and potentially resolve some of these ongoing electric and battery issues.

“Stopping production could allow GM to address shortages,” Fiorani said.

The automaker has been unable to bring its key electric vehicles to market on time but could benefit from using the work stoppage to resolve some of its technical and operational issues, he said.

“GM could increase production more quickly once factories come back online,” Fiorani said.


Other analysts say the disruption is unlikely to work in GM’s favor. GM’s Barra himself said the strike was “not positive” for the company and that an agreement with workers needed to be reached quickly.

“For GM, a possible side effect of a longer strike could be more time to iron out any problems with its electric vehicle launch, but the potential loss of billions of dollars in the process would make it difficult to justify such a ‘silver lining.’ ” said Bill Rinna, GlobalData director of vehicle forecasting for the Americas.

Daniel Ives, an auto analyst at Wedbush, said the strike is “a potentially nightmare situation” for GM because it comes right at a crucial stage in resolving its electric vehicle problems.

“At this crucial stage of electric vehicle adoption, model introduction, sales and marketing, when competition for electric vehicles is increasing across the board, the timing couldn’t be worse,” Ives said in a research note.

Additionally, the UAW strike in the United States could disrupt the flow of critical auto parts to GM plants in Canada and Mexico, hampering electric vehicle production there, Rinna said.

GM’s Ramos Arizpe plant in Mexico has started building the Chevrolet Blazer EV and is expanding production of the Chevrolet Equinox EV, while the Ingersoll plant in Canada plans to produce the BrightDrop Zevo 400 electric delivery van, according to GlobalData.

Source : www.investing.com

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