Chevy To Halt Vette Production

[Duke W.]

Re: Chevy To Halt Vette Production

Sign of the times?
It's been more than a decade since the "recession-proof" Chevrolet Corvette had to endure a production cut due to excess dealer inventory, but that's apparently the case once again. Citing slow sales related to the ongoing automotive recession, GM will turn off the Corvette's factory lights during the week of October 6th. When Vette assembly resumes the following week, production will be scaled back to 15 cars per hour (normal speed is 18.5 cars per hour). Unfortunately, GM says layoffs will accompany the new schedule at the Bowling Green facility, with up to 75 workers losing their jobs. While surprising, the news isn't entirely unexpected. Corvette sales were down 8.5 percent for the year through August of 2008.

What is the source of this report?

[Joe L.]

Re: Chevy To Halt Vette Production

A buddy of mine's brother is a retired Delta pilot. I don't know what his annual pension was, but my guess is around $100K.

When Delta filed bankruptcy, they stopped paying pensions. The federal pension guarantee fund made reduced payments for a few months and then stopped, and Delta retirees will never receive another dime.

You better hope that GM doesn't file bankruptcy, or it will be all over for the retirees.

Duke

Duke----


On what basis did the federal pension guarantee fund stop making payments to the Delta retirees? I thought that they were to continue payments, albeit at vastly reduced levels compared to the original pensions, on a continuing basis.

[Duke W.]

Re: Chevy To Halt Vette Production

I don't know, but that organization has little funding, and there's no way it can take over big pension fund obligations, even at reduced payments, without billing the taxpayers.

In the last few years it was the airlines. Next? Who knows, but Detroit's big three are on the ropes, and this report of shutting down Corvette production for a week and reducing future production rate is a harbinger of things to come.

Federal pension plan law is very archane, but it apparently has enough loopholes to sink a battleship.

For a long time I was under the impression that pension payments by a company were put into an independently managed "trust", and once the funds were placed in the pension "trust", they could not be removed for any reason.

Boy, was I wrong! According to my friend (who got the story from his brother) all these shenanigans have passed previous court challenges, and the Delta pensioneers have no recourse other than an act of Congress to pay their pensions from taxpayer receipts, and I doubt if that will happen.

Duke

[Terry M.]

Re: Chevy To Halt Vette Production

Duke,
I don't know what Jamie's (OP) source is, but here is the first reference I found using Goggle:

http://www.wbko.com/news/headlines/28483224.html

I get the GM corporate press releases, and there has been nothing about it there, but there could have been something local to BG that didn't make the bigger media outlets. So far there is nothing on the Assembly Plant web site.

[Chuck S.]

Re: Chevy To Halt Vette Production

I don't understand, they can't deliver enough ZR1 in time so they sell well over the sticker price and the slow down production? Can someone explain???

greetings,
Rob

"Market Adjustment" is a premium dealers add to the MSRP of newly introduced cars to take advantage of fools that are easily separated from their money. This premium is aimed at those individuals that must have the latest, greatest "thing", and will pay any price to obtain it immediately...it is the perfect application of the law of supply and demand: big demand, little supply = high prices. When dealers are successful at charging a premium, they are simply estimating "what the market will bear". If they are unsuccessful because demand doesn't materialize as expected, market adjustments disappear quickly, followed by real negotiation.

"Market Adjustment" premiums result simply from the inability of ANY production and transportation systems to meet ALL the pent up instantaneous demand for any new product...the "smart money" bides their time until the "new" has worn off a little. While "market adjustment" premiums are not due to restraint of normal production (ZR1), any curtailment of production further reduces the supply and exacerbates the problem. The market adjustment for a ZR1 just got nudged upward.

Edit: I may have misunderstood the direction of your question: ZR1s are built in the same plant as ordinary Corvettes. Dealers are overstocked on standard Corvettes. It is not financially rational to run an entire plant to produce only a relative few cars that are temporarily overpriced. GM gets none of the market adjustment premium...they get the same money for a ZR1 regardless of the dealer's selling price.

[Art A.]

Re: Chevy To Halt Vette Production

Duke I don't know what the different would be, but my brother retired from Bethlehem Steel before it went belly up. The Federal pension fund took over and he is still getting his pension..................it is a LITTLE reduced, but he is still getting it.

A buddy of mine's brother is a retired Delta pilot. I don't know what his annual pension was, but my guess is around $100K.

When Delta filed bankruptcy, they stopped paying pensions. The federal pension guarantee fund made reduced payments for a few months and then stopped, and Delta retirees will never receive another dime.

You better hope that GM doesn't file bankruptcy, or it will be all over for the retirees.

Duke

[Jamie F.]

Re: Chevy To Halt Vette Production

Duke,
It was one of the lead "Banner" stories on AOL all day yesterday.
Here is a similiar one:

http://www.leftlanenews.com/chevrolet-to-pause-corvette-production.html

[John D.]

Re: Chevy To Halt Vette Production

According to the business section of our local tribune the Volt production is being delayed because of the batteries. GM is asking Uncle Sam to donate 25 billion for battery research. So the Volt is far from being ready for mass production.
Meanwhile in my 'hood there are 2008 Corvettes everywhere. Even Clem has one.

[William L.]

Re: Chevy To Halt Vette Production

A buddy of mine's brother is a retired Delta pilot. I don't know what his annual pension was, but my guess is around $100K.

When Delta filed bankruptcy, they stopped paying pensions. The federal pension guarantee fund made reduced payments for a few months and then stopped, and Delta retirees will never receive another dime.

You better hope that GM doesn't file bankruptcy, or it will be all over for the retirees.

Duke

Duke
I worked for Delta for 35 years(NOT as a pilot) Retired in 1999 and so far I have not missed pension check yet. I hope I didn't jinx myself!
I was a de-ice/anti-ice Instructor.
Bill

I am the one warm and comfee in the truck out front!!!

[John D.]

Re: Chevy To Halt Vette Production

I don't understand, they can't deliver enough ZR1 in time so they sell well over the sticker price and the slow down production? Can someone explain???

greetings,
Rob

rob,
GM gets none of the "market rate adjustment" the dealers charge for the ZR-1's. It's pure profit for the dealership. I've been told firsthand anywhere from 20-50 k over list here in the NYC area. I suspect dealers who offer them at or below list don't have any in stock.

jd

[John H.]

Re: Chevy To Halt Vette Production

I suspect dealers who offer them at or below list don't have any in stock.

jd

And won't get any, either. Many dealers will never get allocation for one, at least for the first year, and most dealers with an allocation have them pre-sold. The dealer who sponsors our chapter is one of the highest-volume Corvette dealers in the country, and has only been allocated two; he never adds a "market adjustment" to any limited-edition units, and his two ZR1's are pre-sold.

[Clem Z.]

Re: Chevy To Halt Vette Production

GM told the dealers if you want a ZR1 you have to take 6 Z0-6s. the Z0-6 are getting to be a hard sell as most buyers do not think they are worth the difference in price over a standard corvette. they are also a hard sell used because you can buy a new corvette cheaper than the asking price for a used Z0-6 with the incentives on the new one