General Motors Company (GM - Free Report) idled the Fairfax, Kansas plant on December 3 in order to control oversupply of Chevrolet Malibu midsize sedan manufactured at the plant. On December 1, the automaker had a 164-day supply of Malibu, which was well over the benchmark level.
The plant, which also produces Buick LaCrosse, will not be reopened until January 7, 2013. It employs 3,500 hourly workers and 315 salaried employees.
GM remains the top automaker in the U.S. by sales volume. Last month, the automaker sold 186,505 vehicles, a 3% growth over the prior year. Sales of Malibu fell 0.4% to 10,227 units in the month.
The company has unveiled a redesigned 2013 version of the vehicle in August. Despite that, the popularity of the vehicle has reduced. It has become the sixth-best selling vehicle of the company, down from the second-best selling vehicle.
Auto sales in the U.S. grew 15% to 1.14 million vehicles or 15.5 million on a seasonally adjusted annual rate (SAAR) basis in the month driven by pent-up demand generated from Hurricane Sandy as well as from the aging vehicles, and improving macroeconomic conditions. This is the five-year high sales recorded by the industry since 2007.
In November, the top-selling midsize cars include Toyota Motor Corp.’s (TM - Free Report) Camry, Honda Motor Co.’s (HMC - Free Report) Accord, and Nissan Motor Co.’s (NSANY - Free Report) Altima.
GM, a Zacks #3 Rank (Hold) stock, posted a 9.7% fall in earnings to 93 cents per share (excluding special items) in the third quarter of the year from $1.03 in the corresponding quarter a year ago. However, earnings per share in the quarter far exceeded the Zacks Consensus Estimate of 61 cents.
Revenues in the quarter grew 2.5% to $37.6 billion, surpassing the Zacks Consensus Estimate of $36.3 billion. Worldwide sales volume inched up 1.6% to 2.3 million units from 2.2 million units a year ago. However, total market share declined to 11.6% from 12.1% in the third quarter of 2011.
Operating income fell 11.2% to $1.6 billion from $1.8 billion a year ago. However, adjusted earnings before interest and tax rose 4.5% to $2.3 billion from $2.2 billion a year ago.