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GM To Cut Production, Extend Holiday Shutdown

General Motors will extend its holiday shutdown or make other production cuts at five factories at as it deals with a continued U.S. auto sales slump and fights to stay solvent.

Also Friday, the company announced changes at five other factories that could increase production of some models, all based on a volatile U.S. auto market that has slumped to a 25-year low.

GM logo, General Motors logo
GM logo, General Motors logo

The changes won't be the last as cash-starved GM tries to conserve as much money as possible while awaiting Congressional action on a bailout loan package for Detroit's three automakers.

"Market demand is usually the prevailing criteria," said spokesman Chris Lee. "We're looking at this much more frequently than I've ever seen us as far as making minor adjustments. And I suspect that will be the norm going forward."

GM said it will cancel a down week starting Dec. 8 at its Wentzville, Mo., factory that makes full-size vans, and will keep or restore overtime at factories in Delta Township, Mich., near Lansing; Spring Hill, Tenn.; Arlington, Texas; and Fort Wayne, Ind.

But factories facing cuts include a plant in Lordstown, Ohio, where workers were told that the normal two-week holiday shutdown will be extended until Jan. 20. The sprawling factory complex stamps parts for and assembles the Chevrolet Cobalt and Pontiac G5 small cars.

Also affected is a car plant in Oshawa, Ontario, which will see an additional week of closure starting Jan. 12 on the Chevrolet Impala assembly line. The holiday shutdown will be extended until Jan. 12 at a car-making plant in Orion Township, Mich., near Pontiac, and until Jan. 20 at a car assembly plant in Kansas City, Kan., GM said.

GM also plans to close the Oshawa, Ontario, truck plant sooner than planned. The company had said in June it would close the pickup truck plant by 2010; the new closure date was not available. In addition, GM will slow assembly line speeds at two of the factories.

The automaker normally shutters its plants for two weeks around the Christmas and New Year's holidays, reopening them the first week in January. But with U.S. auto sales down 15 percent and GM sales off 20 percent for the first nine months of the year, the closings were extended.

Workers will get holiday pay for the first two weeks, then go on layoff and get unemployment benefits and supplemental pay from the company.

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At Lordstown, the last scheduled workday will be Dec. 23, although production will start to wind down before that, said Dave Green, president of a United Auto Workers local at the complex.

Green said that after Jan. 20, the Lordstown complex will keep operating around the clock, but assembly line speed will be reduced from the current 62 vehicles per hour to 46.5 vehicles. The Lordstown complex, located about 50 miles southeast of Cleveland, employs about 4,200 production workers.

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Earlier this year the company added workers to the plant as demand for its small, fuel-efficient cars increased. But since then the bottom has fallen out of sales industrywide, and GM later announced it would lay off up to 1,100 of the plant's workers starting Jan. 20.

Green said he's optimistic that GM will resume production as scheduled on Jan. 20, although at the slower assembly line speed.

"I think we'll come back, and then if production warrants, or demand wanes, maybe there will be a little more down time," he said. "It's all driven by the market, so it's really out of our hands."

GM and its Detroit counterparts are seeking billions of dollars in loans from the federal government. Congress is requiring the automakers to come up with plans to become viable before it will decide on the loans.

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 company has said it could run out of cash by the end of this year.

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