GM to lay off 2,000 workers, cut production

GM to lay off 2,000 workers, cut production
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First Published: Tue, Jan 27 2009. 09 42 AM IST
Updated: Tue, Jan 27 2009. 09 42 AM IST
Detroit: General Motors Corp. said on Monday it will cut 2,000 jobs at two plants and halt production for several weeks at nine other US factories as the company takes steps to stop making cars that people aren’t buying.
With the country mired in a recession and some consumers having trouble getting loans, 1,200 workers will be laid off at GM’s Delta Township, Michigan, plant and another 800 will lose their jobs in Lordstown, Ohio. The company is eliminating entire shifts at those plants to bring production in line with the industry’s worst sales slump in 26 years.
Unlike earlier cuts that often singled out truck and SUV plants, these slice systemwide as consumers shun even the small cars that were hot sellers when gas prices hit $4 last summer. In December, GM sold fewer than 13,000 Chevrolet Cobalts, made at the Lordstown plant, compared with nearly 21,000 in June.
SUV and crossover sales didn’t improve much even as gas fell below $2 per gallon. December sales of the GMC Acadia SUV assembled at the Delta Township plant, near Lansing, plummeted more than 49% from a year earlier.
GM spokesman Chris Lee said Delta Township’s second shift will end 20 March and Lordstown’s will end a week later.
The Detroit company is operating under an assumption shared by many analysts that the auto industry will sell 10.5 million vehicles in the US in 2009, down about 20% from last year’s sales of 13.2 million.
The Lordstown plant also stamps parts for and assembles the Pontiac G5, which saw sales drop 8.9% last year. GM started making the Cobalt and the G5 around the clock last summer when gas prices spiked and demand for those small cars skyrocketed.
GM has cut its US hourly work force by more than half from 2000 to 57,000 in 2007. By October 2008, GM had announced plant closures and shift cuts leading to another 4,300 indefinite layoffs.
GM also announced Monday that it would cease production of the Cadillac XLR luxury sports car in Bowling Green, Kentucky, this spring, affecting an estimated 40 workers. GM sold a total of 1,250 XLRs in 2008.
Besides the job cuts, nine of GM’s 15 US assembly plants will have more scheduled “down weeks” in the first half of this year, Lee said. One Canadian plant will be temporarily shut down also.
Word of the additional shutdowns comes about a month after GM temporarily closed 20 factories across North America due to weaker automobile demand. Some plants were closed for the entire month of January.
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First Published: Tue, Jan 27 2009. 09 42 AM IST
More Topics: US | General Motors | Production | Jobs | Economy |