GM to announce more production cuts

Nov 21, 2008

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The Associated Press

DETROIT–General Motors Corp. will extend its holiday shutdown or make other production cuts at up to 10 factories as it deals with a continued U.S. auto sales slump and fights to stay solvent.

The cash-strapped automaker told workers about the cuts on Friday morning, according to local union officials.

Dave Green, president of a United Auto Workers local in Lordstown, Ohio, said workers were told that the normal holiday shutdown will be extended until Jan. 20 at the sprawling factory complex, which stamps parts for and assembles the Chevrolet Cobalt and Pontiac G5 small cars.

The last scheduled workday will be Dec. 23, although production will start to wind down before that, he said.

Details of the other cuts were not available. GM spokesman Chris Lee would not comment on the announcements.

Green said that after Jan. 20, the Lordstown complex will keep operating around the clock, but assembly line speed will be reduced from the current 62 vehicles per hour to 46.5 vehicles. The Lordstown complex, located about 50 miles southeast of Cleveland, employs about 4,200 production workers.

Earlier this year the company added workers to the plant as demand for its small, fuel-efficient cars increased. But since then the bottom has fallen out of sales industrywide, and GM later announced it would lay off up to 1,100 of the plant's workers starting Jan. 20.

Green said he's optimistic that GM will resume production as scheduled on Jan. 20, although at the slower assembly line speed.

"I think we'll come back, and then if production warrants, or demand wanes, maybe there will be a little more downtime," he said. "It's all driven by the market, so it's really out of our hands.''

GM and its Detroit counterparts are seeking billions of dollars in loans from the federal government. Congress is requiring the automakers to come up with plans to become viable before it will decide on the loans.

GM has announced thousands of factory layoffs so far this year and is cutting its salaried staff in order to pare expenses and conserve cash. The company has said it could run out of cash by the end of this year.

In morning trading, shares dipped 7 cents to $2.81.

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