GM to lay off 3,500 at truck, SUV factories

[one...two...tree 2,762]

AP

DETROIT - Sagging pickup truck and sport utility vehicle sales have forced General Motors Corp. to shut down one shift each at four North American factories and lay off about 3,500 workers.

The world's largest automaker by sales said Monday that the cuts, to take effect starting this summer, were brought on by weak demand due to high gasoline prices and an economic downturn.

The cuts will affect pickup factories in Pontiac and Flint, Mich., and Oshawa, Ontario, as well as the full-size SUV plant in Janesville, Wis. The layoffs represent just over 4 percent of GM's hourly manufacturing work force of about 80,000 in North America.

The company said the cuts mean it will make about 88,000 fewer pickups and 50,000 fewer large SUVs this calendar year.

GM said the exact number of layoffs will be worked out with its unions. Workers will get unemployment benefits and supplemental pay that total 80 percent of their normal 40-hour gross pay, said GM spokesman Dan Flores.

"With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities," GM North America President Troy Clarke said in a statement.

For about the past three years, the U.S. auto market has been shifting away from pickup trucks and SUVs to cars and crossover vehicles, but the trend accelerated in recent months due to gas prices that have topped $3.50 per gallon across the nation.

The company expects the layoffs to take place starting July 14 at the Flint, Janesville and Pontiac plants, and Sept. 8 at Oshawa. Most of the factories had already seen layoffs and production cuts due to a parts shortage from a two-month strike at American Axle and Manufacturing Holdings Inc.

GM spokesman Tony Sapienza said the company will eliminate shifts with 750 workers each at Flint and Janesville, 1,150 workers in Pontiac and 900 workers in Oshawa.

"Those are the people that we believe will be impacted based on what the shifts are," he said. "We'll be working with our partners to determine how that's brought to fruition."

Greg Gardner, an analyst with the Oliver Wyman Group, said the cuts look like "a realistic assessment."

"The full-size pickup and SUV market is not going to rebound anytime soon," he said. "It looks like that they don't plan on making up very much of the production loss due to the American Axle strike."

Gardner said GM's announcement reflects the industry's overall production forecast this year, down to about 15 million light vehicles from an earlier forecast of 15.5 million.

"Obviously, the larger, heavier vehicles are taking the biggest hit," he said.

The Flint, Pontiac and Oshawa plants make the Chevrolet Silverado and GMC Sierra pickups, while Janesville manufactures the Chevrolet Tahoe and Suburban and GMC Yukon big SUVs.

GM said pickup sales overall are down 15 percent through March, while sales of large SUVs are off 26 percent. Dealers in much of the country say the bigger vehicles aren't selling because of the economy and gasoline prices.

George Tasker, the top salesman at Martin Chevrolet in Torrance, Calif., said buyers are sitting on the sidelines for most vehicles mainly due to economic uncertainty and declining home values.

"Everybody's going to drive a little bit longer until we can figure out where this thing is going," he said.

Los Angeles-area dealers still can get just about any truck or SUV a customer wants by trading with each other, despite curtailed production from the American Axle strike, he said.

Jesse Toprak, chief industry analyst for the auto information site Edmunds.com, said GM has a 92-day average supply of large trucks. A 60-day supply is considered optimal in the business.

He said the automaker will lose about $4.4 billion in gross sales because of the production cuts, but it's nearly impossible to determine the impact on GM's net profits.

The production cuts should help GM keep its inventory under control, said Catherine Madden, an analyst with the consulting firm Global Insight.

"They're not going to put themselves in a position where they're going to overbuild and sell at any costs," she said.

"They take the hit now instead of being forced with their back up against the wall in September."

GM said it did not forecast how many of those vehicles it expected to make this year, but it sold about 1.1 million of them in the U.S. last year, according to Autodata Corp.

The announcement was made after the close of regular trading. GM shares gained 56 cents, or 2.6 percent, to close at $21.94, and were unchanged in after-hours trading.

The cuts come as 74,000 U.S. workers represented by the United Auto Workers face a May 22 deadline to decide on GM's latest round of buyout and early retirement offers.

GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing nonassembly jobs with new employees who will be paid half the old wage of $28 per hour.

http://www.azcentral.com/business/news/art...-GMCuts-28.html

[Heracles 417]

NAFTA to blame for this as well?

I am sure the unions are the innocent ones.

Edited April 29, 2008 by Boo-Yah!

[SMOKE 1,426]

NAFTA to blame for this as well?

nope. UAW is killing American auto makers....$35.00 an hour, full medical before after retirement, & a retirement plan that makes the military retirement look crappy.....TO TIGHTEN A BOLT!

[Ban Hammer 12,999]

seems like a good time to buy a truck.

[Heracles 417]

NAFTA to blame for this as well?

nope. UAW is killing American auto makers....$35.00 an hour, full medical before after retirement, & a retirement plan that makes the military retirement look crappy.....TO TIGHTEN A BOLT!

$35 an hour!! ####..

[SMOKE 1,426]

NAFTA to blame for this as well?

nope. UAW is killing American auto makers....$35.00 an hour, full medical before after retirement, & a retirement plan that makes the military retirement look crappy.....TO TIGHTEN A BOLT!

$35 an hour!! ####..

when they closed the GM plant in OKC the majority of employees were making north of $30.00. now figure in free medical & a pension from your dreams...not hard to see why American automakers are struggling today.

[Heracles 417]

when they closed the GM plant in OKC the majority of employees were making north of $30.00. now figure in free medical & a pension from your dreams...not hard to see why American automakers are struggling today.

Funny how the unions never take any responsibility for that. The same thing happened with the Ford plant in Norfolk.

[Peikko 1,575]

So, people who make cars shouldn't earn a living wage? How enlightening. Another example of the 'man is an island' philosophy. "Decent wages should only be paid to people who don't work in an industry that might effect how much I have to pay for a product that I want/need." Bloody unions, interfering in your right to get rich on the backs of others.

[SMOKE 1,426]

$30.00 X 40hrs = $1200.00 a week X 52 = $62,400.00 a year + medical + retirement. is slightly more than a "living wage"...its ridiculous.

[Heracles 417]

So, people who make cars shouldn't earn a living wage? How enlightening. Another example of the 'man is an island' philosophy. "Decent wages should only be paid to people who don't work in an industry that might effect how much I have to pay for a product that I want/need." Bloody unions, interfering in your right to get rich on the backs of others.

Sure killed off manufacturing in England.

[kaydee457 13]

Unions have out lived their usefulness in this country......

Their wages wouldn't be so damned bad if they were productive but unions squelch productivity with ridiculous work rules and artificial production quotas.

It's a real shame! Last I read you could pick up some good values in housing; 500k home for 150k.....problem is, if you've no job then what to do with it?

[Peikko 1,575]

So, you want it both ways? You want to be able to command a huge wage in the industry you work in, but not pay enough for goods to be made in a way that allows for a good wage for those who make them?

Seems to me that you and those who think like you want the entitlement of being able to command 100k a year on the backs of 'suckers and dead beats' who should only be able to command 20k because they work in industries that provide you with the goods and services at prices that you want to pay with your 100k.

You guys live in a society where you rely on 'suckers and dead beats' to bring you clean water to your homes and take the shite away. A society where food is produced for you to eat not at the price it costs in man hours, but at a cost you are prepared to pay. A society where infrastructure is provided so you can get from your clean home to your place of employment at a cost you can afford to pay. A society where should you get sick, you get treatment from nurses who don't demand pay based on their training, skills and the physical manpower they put into their jobs but based on what the private insurance industry will pay to keep the insurance premiums at a level you are prepared to pay. But, best of all, instead of wanting to pay into that society from which you derive these huge but hidden benefits, your 'entitlement' to get rich, you would prefer to laud it over the 'suckers and dead beats' and claim that their choices reflect their lack of personal responsibility.

Sometimes, society really sucks.

[Jenn! 918]

[Amby 490]

I was surprised by how much people who work in these factories make as well. We have a Toyota plant here where they make the Tundra and starting wages are about $24/hr with all of the benefits mentioned in this thread earlier. Recently, they laid off all of their part time employees because they couldn't afford to keep them on anymore.

[Mr. Big Dog 10,747]

How about US automakers fail because they failed to keep competitive with their products in terms of quality, appeal and - you guessed it - fuel economy. Running from quarter to quarter, the folks upstairs failed to properly position their companies with competitive products and efficient production lines.

But sure, why should the management ranks ever be responsible for anything but renting a truck to cart home those million dollar compensation packages?

ETA: The Nissan plant in Smyrna, TN offers kick-### wages and benefits to it's workers who happen not to be unionized. And despite those wgaes and bennies, Nissan stays competitive.

Edited April 29, 2008 by Mr. Big Dog