CANADA: GM axe poised over four truck/SUV plants - paper
General Motors is expected to announce ahead of its annual general meeting in Wilmington, Delaware, on Tuesday that it is axing production at four factories in North America next year, including its large pickup-truck plant in Oshawa, Ontario, the Toronto-based Globe and Mail newspaper reported.
Earlier media reports had said GM was eyeing cutting back on production of gas-guzzling trucks and SUVs as sales dwindle in the face of $US4 a gallon petrol in the US. Despite a recent strike at key supplier American Axle American Axle & Manufacturing Holdings (AAM) that hit output, analysts have said recently GM's truck and SUV inventory remains too high.
The Globe and Mail said all four doomed GM plants assemble pickups or traditional sport utility vehicles.
In addition to GM's Oshawa move, which will wipe out more than 1,000 jobs at the General Motors of Canada facility, GM is closing a plant in Janesville, Wisconsin, that makes its mammoth Suburban and Tahoe SUVs and a plant in Moraine, Ohio, that assembles its mid-sized SUVs, the Chevrolet Trailblazer and GMC Envoy, industry sources told the paper. The fourth plant slated for closing is in Silao, Mexico.
The Globe and Mail said it was not clear as of last night whether these shutdowns would be temporary, on the expectation that the US housing market would recover and thus kick-start pickup truck sales again, or permanent.
The paper's sources were also unsure if GM plans to develop new cars or smaller crossovers for the idled SUV plants in the belief that the consumer shift to those vehicles is permanent.
The Globe and Mail noted that GM chairman Rick Wagoner was expected to make the announcement on Tuesday just before GM's annual meeting.
It added that GM had agreed during its recent contract negotiations with the Canadian Auto Workers union to keep the Oshawa truck plant operating on rotating shifts until September, 2009, avoiding layoffs for about 900 union members.
The Globe and Mail said, if GM closes the plant, it would no longer be producing trucks in Canada and would be reduced to one assembly plant there plus a share of a joint venture plant in Ingersoll, also in Ontario.