|
10k gm workers from truck plants laid off { April 2008 } Original Source Link: (May no longer be active)
http://www.freep.com/apps/pbcs.dll/article?AID=/20080603/BUSINESS01/80603053/1014/BUSINESS01http://www.freep.com/apps/pbcs.dll/article?AID=/20080603/BUSINESS01/80603053/1014/BUSINESS01
General Motors to cease production at 4 factories
By KATIE MERX • FREE PRESS BUSINESS WRITER • June 3, 2008
WILMINGTON, Del. — General Motors Corp. will idle four truck plants and boost production of cars as part of a plan to respond to a rapidly changing U.S. auto market and align the business for a return to profitability in North America, Chairman and CEO Rick Wagoner said this morning in advance of the corporation’s annual meeting.
GM will idle its truck plants in Moraine, Ohio; Oshawa, Ontario; Janesville, Wis,; and Toluca, Mexico, which he said employ 10,000 workers and make midsize SUVs, pickup trucks, large SUVs and medium-duty trucks.
The reduced assembly will result in cuts at stamping and powertrain plants, as well.
GM also announced that it is studying the future of the Hummer brand, considering everything from a major repositioning of the brand to its partial or full sale.
Additionally, the automaker made a series of announcements about adding shifts and products to new U.S. car plants, including a third shift in Orion Township.
The changes are intended to address a recent and rapid shift in U.S. consumer demand in the midst of a weak U.S. economy, mortgage crisis and gas prices above $4 per gallon driving an unprecedented shift in consumer preferences to cars and crossovers from large pickups and SUVs.
The shift has been particularly tough on GM and its fellow Detroit automakers, who had come to depend on larger vehicles for their largest profit margins.
"The U.S. industry is going through changes probably faster than we've ever seen before," GM President and COO Fritz Henderson said.
Going forward, GM's focus on cars and crossovers will accelerate, Wagoner said. GM plans for 18 of its next 19 new product launches in the United States to be cars or crossovers.
"Higher gas prices are having a significant effect on U.S. auto sales levels, and especially on mix, as consumer demand shifts from trucks and SUVs, to cars and crossovers," Wagoner said.
In response, GM will add third shifts at its assembly plants in Orion Township and Lordstown, Ohio. Orion manufactures the Chevrolet Malibu and the Pontiac G6, and Lordstown, Ohio, builds the Chevrolet Cobalt and the Pontiac G5.
Wagoner also said GM:
• has approved the production funding for the Chevrolet Volt range-extended electric car. The Volt, expected to be ready for sale by November 2010, will be manufactured at Detroit Hamtramck Assembly.
• will build the next-generation Chevrolet compact car in Lordstown. The new Chevy car will be the first U.S. application of GM's global architecture strategy, Wagoner said.
"This next-generation compact car will be better equipped than today's compact car," Wagoner said. " ... And most importantly, have a 1.4-liter turbo engine that, when mated with a manual transmission, offers a 9-mile-per-gallon fuel economy improvement over Chevy's entry in this segment today."
•will build a new 1.0- to 1.4-liter turbo engine in Flint.
•has approved the next-generation Chevrolet Aveo for sale in the United States beginning in the second half of 2010.
All production plans are pending agreements with local governments, Wagoner said.
Jim Graham, president of the UAW local at Lordstown Assembly, said workers in his plant "were ecstatic" over the news that more jobs and products are headed to the Northeastern Ohio assembly plant, but "saddened" to hear the news of job cuts at four truck plants.
"This will affect thousands of families and communities," Graham said. "We have mixed emotions."
Buzz Hargrove, president of the Canadian Auto Workers, is scheduled to hold a conference call to address the cuts.
The city development director from Moraine, Ohio, asked Wagoner during a news conference in advance of the annual meeting if there was any hope that the company would find a new purpose for tjhe mid-size SUV plant there that is a major anchor of that town's economy.
Wagoner's response was somber and not promising.
"We really would not foresee the likely prospect of new products in the plants we've announced," Wagoner said. "As we sit here today it would be inaccurate for me to leave you with a lot of optimism."
The shift in the U.S. market has been dramatic, he said.
"In the last quarter of last year, we sold on average over 102,000, 105,000 large pickups and utilities per month," Wagoner said. "Over the last few months, that has dropped to 65,000 units. Even in the first quarter, we didn't see that kind of shift."
All told, the truck cuts will reduce GM's North American truck production by 700,000 units, about 40% of 2007 production. Further, the measure will reduce North American total production to 3.7 million by 2010, down from expected 2008 production of 4.2 million.
"We at GM don't think this is a spike or temporary shift; we believe that it is, by and large, permanent," Wagoner said.
GM believes the cuts will result in another $1 billion reduction in fixed costs by 2010. That is in addition to the $5 billion fixed-cost reduction the automaker expects to gain from its latest UAW contract and $9 billion in fixed cost reductions accomplished in 2006 and 2007.
But Credit Suisse auto analyst Chris Ceraso said: "Bottom line: the reduction in truck output looks likely to outweigh the increase in car output, which should put downward pressure on earnings estimates for 2009 and 2010."
Contact KATIE MERX at 313-222-8762 or kmerx@freepress.com
|
|
