GM announces more production cuts in North America

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Robert Snell / The Detroit News


DETROIT -- General Motors Corp. is telling workers this morning it will make further production cuts at several factories, according to people briefed on the discussions.
GM announced it will shut down plants in Orion Township, Oshawa, Ont., and Lordstown, Ohio, for an additional week in January and reinstate a week-long shutdown in Wentzville, Mo., in December.

The Detroit automaker also moved up a temporary week-long shutdown in January at its plant in Kansas City that makes the Chevrolet Malibu and Saturn Aura and said it will stop operations at its Oshawa truck plant in May 2009, about two months earlier than previously announced.



GM has announced thousands of factory layoffs so far this year and is cutting its salaried staff in order to pare expenses and conserve cash.
"The impetus really is the extreme unpredictability in the market right now," GM spokesman Chris Lee said. "In some cases, we are adjusting our plant production schedules more frequently to respond to the market than we ever have in the past."

Dave Green, president of UAW Local 1714 in Lordstown, Ohio, said workers were told at 8 a.m. that the plant would be shut down for an extra week Jan. 5. Along with previously announced shutdowns, the plant, which employs about 5,000 workers who make the Chevrolet Cobalt and Pontiac G5, will be shut down from Dec. 23 until Jan. 20.
Cobalt sales were down 62 percent last month compared to a year ago and G5 sales were off 69 percent.

When the plant reopens, about 130 workers will be laid off, and the rate of production will be slowed, said Green, adding that workers were bracing for deeper cuts.
"It's almost a bit of a relief," he said. "It could have been worse. Don't be sorry for us, go buy a Cobalt."

In other moves, GM will reinstate scheduled overtime at its plants in Delta Township, Spring Hill, Tenn., Arlington, Texas., and Ft. Wayne, Ind. The automaker also will slow the speed of its production line at the Kansas City plant earlier than previously announced. The change in production speed will happen Jan. 20 instead of the first week of February.
The new cuts come as GM tries to boost its cash reserves and pursues a piece of $25 billion in federal aid after warning it might not have enough money to meet minimum funding requirements early in 2009.

On Thursday, congressional leaders asked Detroit's Big Three automakers to present a plan by Dec. 2 for restructuring their businesses and how they would spend $25 billion in government loans.
GM has lost about $73 million since 2004, including more than $20 billion this year, and suffered a 45.1 percent sales decline last month, its worst since the end of World War II, when adjusted for population growth.

The automaker outlined a plan in July to increase liquidity by $15 billion, and earlier this month announced an additional $5 billion in cost savings, including more job cuts.
The automaker ran through $6.9 billion in the third quarter, leaving it with $16.2 billion in cash, securities and readily available assets, down from $21 billion at the end of June.
The cash problem forced GM this month to halt talks to acquire rival Chrysler LLC from private equity firm Cerberus Capital Management LP.

The Associated Press contributed to this report.