GM raises production as "clunker" sales rise

From Reuters:

General Motors Co said on Tuesday it is increasing production for the second half of 2009 after a surge in sales ignited by the U.S. government's "Cash for Clunkers" incentives program.

The No.1 U.S. carmaker said it would build 60,000 more vehicles than planned for the third and fourth quarters by increasing overtime, adding shifts at several North American assembly plants.

The move will bring about 1,350 hourly workers in the United States and Canada back to assembly lines, GM said.

GM joins other automakers including Ford Motor Co in raising output after the runaway success of the incentive program, which offers payments of up to $4,500 to people who trade in old gas guzzlers for fuel-efficient vehicles, helped the companies reduce a glut of unsold cars and trucks.

By late July, the "clunkers" program, inspired by similar programs in Europe, had been drained of the $1 billion in its original budget. Congress authorized another $2 billion to extend the program.

GM's focus on more energy-efficient vehicles is welcome news for the energy efficiency community, and the increased production is perhaps even more welcome news for the struggling manufacturing sector.