GM to close 20 plants in N. America temporarily

December 13, 2008|By From Sun staff and news services

General Motors Corp. said yesterday that it will temporarily close 20 factories across North America and sharply reduce its vehicle production as it tries to adjust to weaker automobile demand.

GM said it will cut 250,000 vehicles from its production schedule for the first quarter of 2009, including the cut of 60,000 vehicles announced last week.

Normal production would be about 750,000 cars and trucks for the quarter, spokesman Tony Sapienza said.

Many plants will be shut down for the whole month of January, he said, and all told, the factories will be closed for 30 percent of the quarter.

"We're adjusting pretty dramatically," spokesman Chris Lee said.

The move affects most of GM's plants in the U.S., Canada and Mexico.

During the shutdowns, employees will be temporarily laid off and receive a portion of their normal pay from the company. They can also apply for state unemployment benefits, Lee said.

It is unclear how the General Motors Powertrain Baltimore Transmission Plant will be affected by the plant closings.

The facility supplies transmissions to the plants in Arlington, Texas; and Pontiac and Flint, Mich., said John Raut, a spokesman for the plant near White Marsh.

Those plants are slated for the temporary closure.

"It's going to impact us, but we don't know when and how much," Raut said.

The GM plant near Wilmington, Del., where some Maryland residents work, also is one of the factories set for the temporary shutdown.

GM and nearly all automakers who sell in the U.S. are mired in the worst sales slump in 26 years. GM reported its sales in the U.S. plunged 41 percent in November and are down 22 percent for the first 11 months of the year compared with the same period last year.

Cash-strapped GM is seeking government loans to stay in operation beyond the end of the year. The White House said yesterday that it might tap into its $700 billion Wall Street bailout funds to help GM and Chrysler stay in business.

The Senate blocked a measure to provide $14 billion in immediate loans.

The rescue measure failed late Thursday after Senate Republicans balked at passing the bill without more wage and benefit concessions from autoworkers.

Lee said yesterday's production cuts are unrelated to the rescue's failure and had already been planned.

The entire auto industry has been making severe production cuts as it adjusts to the reality of lower automobile demand. Honda Motor Co. also said yesterday that it was cutting production in North America by 119,000 vehicles for its fiscal year that will end March 31.

That brings Honda's expected production for its fiscal year to 1.3 million units, a spokesman said.

Lee said GM's production cuts will be achieved by adding "down weeks" to the schedules at the affected plants. During down weeks, which can be staggered during a given period of time or can come several at once, the plant will not produce anything and employees will be furloughed.

"We look at it on a plant-by-plant basis and make decisions regarding their production schedule in terms of market demand, so it's not a blanket. ... We look at it plant by plant and make those decisions," Lee said.

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