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November 21, 2005

USA: GM CEO expected to announce US plant closings today

General Motors, which has been losing billions of dollars along with share in the key US market, is planning to close some North American plants, a GM spokesman told The Associated Press on Monday.

General Motors, which has been losing billions of dollars along with share in the key US market, is planning to close some North American plants, a GM spokesman told The Associated Press on Monday.

Brian Akre told AP that GM chairman and CEO Rick Wagoner was expected to announce the closures during a speech to employees from GM’s Detroit headquarters before the financial markets open [New York at 14:30GMT].

A notice on GM’s press website said the address to employees would begin at 08:30 Eastern Time (13.30GMT).

Automotive News, citing a GM insider, said four plants would be closed. Under the current United Auto Workers contract, which prohibits plant closures until 2007, the facilities would actually be idled, with the workers continuing to receive pay, but that would still save GM money. The paper said the automaker was only using 74% of its US production capacity.

AP noted that GM has been crippled by falling US market share, high labour and health care costs and other issues, and lost nearly $4 billion in the first nine months of this year.

The Associated Press added that the automaker could also be facing a strike at Delphi, its biggest parts supplier, which filed for bankruptcy protection last month. GM spun off Delphi in 1999 and could be liable for billions in pension costs for Delphi retirees.

GM also is under investigation by the US Securities and Exchange Commission for accounting errors, the report added.

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