In what US industry observers said was the biggest one-time cut in recent years, General Motors last night said it would axe a production shift at four full-size pickup truck and SUV plants in Canada and the US.
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The move takes almost 140,000 vehicles out of the automaker’s 2008 production schedule.
In a statement, GM said only that the cuts “will result in lower staffing requirements at all four plants, and those details will be worked out over the next several weeks with the UAW and CAW” but the New York Times said about 3,550 workers would be laid off.
The paper added that affected workers who do not leave the company voluntarily through an ongoing buyout programme that offers them as much as US$140,000 will continue receiving benefits and most of their pay under the automaker’s “jobs bank” programme, as part of the contract with the United Automobile Workers. GM’s 74,000 hourly workers have about three more weeks to decide whether to take a buyout, the New York Times noted.
GM said the affected plants are its full-size pickup truck assembly plants in Pontiac and Flint in Michigan plus Oshawa, Ontario and its full-size SUV assembly plant in Janesville, Wisconsin.
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By GlobalData“The decisions were made to bring production capacity more in line with market demand,” the automaker said.
About 88,000 units of full-size pickup (around 11% of 2007 sales) and 50,000 units of full-size SUV production (15%) will be removed from production capacity for the remainder of the 2008 calendar year, GM said.
It added that the full-size pickup truck and full-size SUV segments have “softened” for the entire industry – down 15 and 26%, respectively, in the first quarter of 2008.
“Nonetheless, GM remains the segment leader in both instances, with nearly 40% share of full-size trucks and more than 63% share in the full-size SUV market,” the automaker said.
Shifts will be axed at Flint (heavy duty Chevrolet Silverado and GMC Sierra), Janesville (Chevrolet Tahoe and Suburban, GMC Yukon, Yukon XL) and Pontiac (Chevrolet Silverado, GMC Sierra) on 14 July and at Oshawa Truck (Chevrolet Silverado and GMC Sierra) on 8 September 8.
“With rising fuel prices, a softening economy, and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities,” said GM North America president Troy Clarke.
“This is a difficult move, but we remain committed to retaining and growing our leadership position in the full-size truck market.”
Clarke noted that with the market shifting toward cars and crossovers, GM is seeing strong sales of those models. He added that the company is continuing to explore options to increase production but nothing has been decided.
