General Motors Cuts Production and 2000 Factory Jobs for 2009
With a lowered 2009 sales forecast, bulging inventories, and a viability plan due to the U.S. government next month, General Motors is letting 2000 factories workers go and introducing periodic shutdowns at strategic U.S. factories.
The job cuts will come from the elimination of one shift from GM’s plants in Lordstown, Ohio and Delta Township, Michigan. More changes at the two plants include dropping the plants to one shift each starting February 9th at the Lordstown plant and March 30th at the Delta Township plant. When the plants drop to only one shift, it will be without losing any workers by simply having the first and second shifts’ working alternating weeks.
Earlier this year, the Lordstown plant ramped up production of the Chevrolet Cobalt and Pontiac G5 as consumers scrambled to find fuel efficient vehicles on the market. With consumers now hesitant to buy new vehicles because of the economic downturn, GM finds even more production cuts necessary as it lowered its 2009 industry sales forecast to 10.5 million vehicles.
In addition to cutting production at the Lordstown (Chevrolet Cobalt and Pontiac G5) and Delta Township plants (Buick Enclave, GMC Acadia, and Saturn Outlook), ten of GM’s other North American plants will be idled for some number of weeks during the year. The production cuts are in response to shrinking market demand and ever-expanding inventories. GM currently has a 102-day supply of new vehicles, which is higher than the industry average of 94 vehicles. The average is about 50 percent higher than what is considered normal for the industry.
Other plants announced to be affected by the production cuts are the truck plant in Pontiac, Michigan and the sedan plant in Hamtramck, Michigan. The truck plant will begin producing 44 percent fewer vehicles per hour and the sedan plant will be 68 percent less. GM’s other sedan plant in Orion Township, Michigan will lose a shift on February 2nd as well.
Amidst these job losses and production cuts, GM and plant managers are hopeful that sales may get a boost with the recent introduction of several new and redone models. These models include the Cadillac SRX, Chevrolet Cruze, Equinox, and Volt.
Source: Automotive News