Union fears made public on February 5 have come true with the news that General Motors, citing slumping sales of ageing big saloon car and small truck models, will permanently lay off 2,850 workers at two US plants.

The cutbacks are effective from April 15 and will lead to the elimination of one of two shifts and 1,750 workers at Orion Township, Michigan and 1,100 workers at a Linden, New Jersey truck factory, said The Detroit News, which carried the rumour-fueled original story.

The newspaper said that GM’s labour contract with the United Auto Workers union will see that the laid-off workers get 95 percent of their straight-time pay for up to 42 weeks while some workers are expected to transfer to other GM plants.

The Detroit News added that, the layoffs, though expected, were a major blow to union leaders and government officials fighting to keep the two plants open beyond 2004, when GM plans to halt production at both facilities.

The Orion and Linden plants currently employ 3,700 and 2,400 hourly workers respectively, the newspaper said.

The job cuts come as GM tries to trim excess capacity in North America without violating its UAW contract, which prohibits the Detroit-based vehicle makers from closing any U.S. assembly plants before the contract ends in September 2003, the Detroit News added.

The paper said the plant was being considered for the next generation Pontiac Grand Am which would transfer from Lansing.
This is where GM has just opened a state-of-the-art Cadillac plant in the town which is the spiritual home of GM#;s doomed Oldsmobile marque.

GM wouldn’t comment on the future of the 65-year-old Linden plant. “The future of the facility beyond the (2004) timeframe has not been determined,” GM spokesman Dan Flores told the Detroit News.

The paper said that Orion currently builds the large car models Buick LeSabre and Park Avenue, Pontiac Bonneville and Oldsmobile Aurora while Linden assembles the old Chevrolet Blazer sport-utility vehicle, which is being phased out, and crew cab versions of the Chevy S10 and GMC Sonoma small pickups. It also builds the GMC Jimmy for Canada.