February 28, 2003

BY JOE MILLER
BLOOMBERG NEWS

SPRING HILL, Tenn. -- General Motors Corp., the world's largest automaker, will stop producing the Saturn Ion for two weeks because inventories of the new small car are higher than the company expected.

Saturn introduced the sedan in the fourth quarter of 2002 to replace its S Series car. Employees at the Ion car plant in Spring Hill, Tennessee, will use the down time to ramp up production of the new Ion coupe and won't be laid off, said Saturn spokesman Mike Gardner.

"It gives us a chance to do an inventory adjustment," Gardner said. "Our advertising is just starting to work for us now."

General Motors had a 143-day supply of the Ion at the end of January, according to Ward's AutoInfoBank, which collects auto sales data. Automakers try to maintain a rate of about 60 days.

The Detroit-based company is trying to turn around the unprofitable Saturn division by increasing sales with new models such as the Ion, the Vue sport-utility vehicle and a planned minivan. General Motors expects Saturn annual sales to almost double to 500,000 cars and trucks by 2005 from about 280,000 last year.

National advertising for the car starting last month, Gardner said. The automaker sold 5,386 Ion sedans in January, up from 2,592 in December. General Motors also sold 2,785 S Series cars in January and 3,594 S Series cars in December.


GM to Trim Production of Saturns
Thursday February 27, 4:36 pm ET
By Michael Ellis

DETROIT (Reuters) - General Motors Corp. (NYSE:GM - News) on Thursday said it will cut back production of its slow-selling Saturn small- and mid-size cars by shutting the two plants where the cars are assembled for two weeks in March.

The Saturn L Series, the division's first entry in the highly competitive mid-size car segment, has suffered weaker-than-expected sales ever since it went on the market in 1999. L Series sales fell 17 percent last year to 81,172 units in the United States, far below the 200,000 capacity at the Wilmington, Delaware, plant where the cars are assembled.

Saturn expects stronger results for its new small car, the Ion, which replaced the aging S Series in Saturn's lineup.

In January, its third month on the market, Saturn sold 5,386 Ions in the United States, more than double the results from December and November.

Saturn expects a new advertising campaign that began in January will help Ion post a double-digit sales gain in February, spokesman Mike Gardner said. Selling off the remaining S Series small cars should also boost Ion results.

The addition of the "quad coupe" -- a two-door with an additional small, rear-opening back doors -- to the Ion lineup in April should also boost sales, Gardner said. Saturn is not backing off its annual sales target of 150,000 Ions, he added.

"In February ... we're going to see a strong double-digit increase in sales," he said. "We're pleased. Once we fully ramp up ... annual sales should be in the 150,000 range. The response has been good to the product."

The Ion has met mixed reviews since it was launched in November. Car and Driver magazine said the Ion "is probably the most disappointing all-new American car in a decade," while Consumer Reports said the Ion is "a very disappointing car." But other car publications have been more complimentary.

The shutdown during the first two weeks of March will help GM cut inventories of unsold Saturn L Series and Ion cars down from a 100 days supply currently, Gardner said.

The shutdown will also allow the Spring Hill, Tenn. assembly line where the Ion is built to prepare for production in March of the Ion "quad coupe."

Production of the Saturn Vue sport utility vehicle, which is made on a separate assembly line in Spring Hill, will not be affected, GM said.

Saturn backed away from its policy of not having incentives on its vehicles and in January and February offered zero percent financing for up to five-year terms on both the Ion and the L Series. Cash rebates of $3,000 were also offered on the L Series.

Workers at the Wilmington plant will be laid off during the two-week shutdown and will receive unemployment pay, Gardner said. At Spring Hill, workers will prepare the plant for the new Ion model.

i don't recall gm every stopping production on the s series...so this is a big deal that the ion is doing so poorly...almost every review said it was a step backwards in almost every category except the car's handling