General Motors has announced plans to shutter production at its Fort Wayne Assembly truck plant for two weeks as inventory levels pick up and exceed demand.
The announcement led to a 3% drop in shares in early trading on Feb. 23.
The Indiana facility builds full-size trucks, including Chevrolet Silverado and GMC Sierra pickups. Trimming production of the highly profitable pickups signals a shift from what automakers did over the last two years to keep pace with demand amid a parts shortage.
"GM probably is trying to maintain pricing power with this move but it's also contradictory to what they've been saying for a while recently that demand remains very strong," Morningstar analyst David Whiston told Reuters.
Analysts warn that rising interest rates and high vehicle prices could lower demand as inventories of new vehicles climb.
However, GM reported earlier that its production was up over the past month and that demand remained "fairly consistent," leading to an increase in inventory.
In 2022, GM idled its truck plant for two weeks because of a critical shortage of semiconductor chips. Even with the shortage, the automaker sold 1.2 million trucks across the United States in 2022, according to the company's latest annual filing.
