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GM Trimming 1st-Quarter Production 0.2%

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From Bloomberg Business News

General Motors Corp. said Thursday that it is cutting its planned first-quarter production in North America by 0.2%, to 1.48 million units, in an effort to trim supplies of unsold vehicles.

The reduction of about 3,000 cars follows Ford Motor Co.’s announcement earlier this week that it was trimming output in the quarter by about 4%, to 1.12 million cars and trucks.

Chrysler Corp. is expected to slice its production by about 4% from its most recent plan, but it will remain the only Detroit auto maker to build more cars and trucks in the period than it did a year ago, according to the industry journal Ward’s Automotive Reports.

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GM has a higher-than-average amount of unsold vehicles on dealer lots. The world’s largest auto maker had a 75-day supply of cars and trucks at year-end, according to Autodata Corp., a consulting firm. A 60-day supply of cars and trucks is considered ideal.

GM now expects to produce 94,000 fewer units than the 1.58 million it built in the first quarter of last year--a 5.9% reduction.

The latest GM schedule for the United States, Canada and Mexico revises a plan released a month ago. It calls for no change in truck output.

GM has three plants closed this week. The Hamtramck, Mich., Cadillac luxury car plant is closed until Tuesday to reduce assembly to about 700 cars a day, Ward’s said. Production a year ago was 900 cars daily, Ward’s said.

Cadillac officials could not be reached for comment, but luxury car sales were sluggish in 1995. Cadillac sales declined 14% to 180,504 from the year before.

GM’s Doraville, Ga., plant is closed for a changeover to production of new minivans, a spokesman said. A plant in St. Therese, Canada, is shut until Tuesday to adjust for high inventories of Camaro and Firebird cars.

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GM and other auto makers began 1995 at high production levels, expecting much higher sales than the 14.8 million vehicles the industry ended up selling in the United States last year. As a result, GM spent much of the year trimming output to reduce swelling inventories. GM said it produced 5.39 million cars and trucks in North America last year, its highest output since 1989.

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