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General Motors is cutting several hundred jobs at its plant in Lordstown, Ohio as the automaker adjusts to dramatically slower demand for cars. The plant, which employs just under 3,000 workers, builds only the Chevy Cruze.
Friday afternoon plant leaders informed workers the facility will be slowing the assembly lines by eliminating one of two shifts starting in mid-June. General Motors says up to 1,500 workers could be impacted, though the exact number of jobs being eliminated will not be known for a few weeks.
The move is not surprising given the dramatic drop in demand for sedans, especially in the United States. This year, car sales are down 13.2 percent while sales of pickups, SUV's and crossovers are up seven percent. For the Chevy Cruze, the drop in sales has been even more severe.
This year, Cruze sales have fallen 28 percent according to the research firm Autodata. In 2017, GM sold just over 184,000 Cruze models in the U.S., which was down 32 percent from just four years ago when sales of the car topped 273,000 vehicles. The steady decline prompted GM in early 2017 to go from running assembly lines around the clock at Lordstown to cutting back to two shifts.
This new production cut comes as new data shows demand for utility vehicles accelerating. The auto consulting firm IHS Markit says loyalty among SUV and crossover owners hit an all-time high last year, as 66.9 percent of U.S. households with an SUV or crossover utility vehicle who returned to the market bought another utility vehicle.
"The broad range of utilities available, whether it be based on size, price or technology, now rivals the choice among sedans and continues to grow," said Tom Libby from IHS Markit.