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GM to lay off 2,000, cut production at 9 US plants

GENERAL Motors Corp. said yesterday it will cut 2,000 jobs at two plants and halt production for several weeks at nine other US factories as the company takes steps to stop making cars that people aren't buying.

With the country mired in a recession and some consumers having trouble getting loans, 1,200 workers will be laid off at GM's Delta Township, Michigan, plant and another 800 will lose their jobs in Lordstown, Ohio. The company is eliminating entire shifts at those plants to bring production in line with the industry's worst sales slump in 26 years.

Unlike earlier cuts that often singled out truck and SUV plants, these slice systemwide as consumers shun even the small cars that were hot sellers when gas prices hit US$4 last summer. In December, GM sold fewer than 13,000 Chevrolet Cobalts, made at the Lordstown plant, compared with nearly 21,000 in June.

SUV and crossover sales didn't improve much even as gas fell below US$2 per gallon. December sales of the GMC Acadia SUV assembled at the Delta Township plant, near Lansing, plummeted more than 49 percent from a year earlier.

GM spokesman Chris Lee said Delta Township's second shift will end March 20 and Lordstown's will end a week later.

The Detroit company is operating under an assumption shared by many analysts that the auto industry will sell 10.5 million vehicles in the US in 2009, down about 20 percent from last year's sales of 13.2 million.

The Lordstown plant also stamps parts for and assembles the Pontiac G5, which saw sales drop 8.9 percent last year. GM started making the Cobalt and the G5 around the clock last summer when gas prices spiked and demand for those small cars skyrocketed.

"In July and August we were hiring people for a third shift here," said Dave Green, president of UAW Local 1714, one of two locals in Lordstown, representing fabrication workers at the plant.

At the time, the plant near Cleveland employed about 4,200 people, including 300 salaried employees. In November, GM said it would slow production across all the plant's shifts, eliminating 1,100 workers. The next month, the company said it would cut the third shift, affecting 900 workers, as US auto sales fell to their slowest pace since 1982.

"Unemployment in the surrounding area is higher than the national average," Green said. "It's going to be very difficult to find jobs in this area."

The Delta Township plant employs about 3,000 hourly workers, according to Brian Fredline, president of UAW Local 602. They make three crossover vehicles: the Buick Enclave, GMC Acadia and Saturn Outlook.

GM has cut its US hourly work force by more than half from 2000 to 57,000 in 2007. By October 2008, GM had announced plant closures and shift cuts leading to another 4,300 indefinite layoffs.

GM also announced yesterday that it would cease production of the Cadillac XLR luxury sports car in Bowling Green, Kentucky, this spring, affecting an estimated 40 workers. GM sold a total of 1,250 XLRs in 2008.

Besides the job cuts, nine of GM's 15 US assembly plants will have more scheduled "down weeks" in the first half of this year, Lee said. One Canadian plant will be temporarily shut down also.

Word of the additional shutdowns comes about a month after GM temporarily closed 20 factories across North America due to weaker automobile demand. Some plants were closed for the entire month of January.

The Lordstown and Delta Township plants are expected to come back on line from their extended holiday shutdown Feb. 2, but only one shift will operate. Employees will alternate the weeks they work until the second shifts are eliminated.

GM factory workers who get laid off typically get "sub pay," in which they receive unemployment benefits, and GM pays the difference, up to most of their salary, for 48 weeks. After unemployment pay runs out, the laid-off workers would go into the jobs bank, where the company pays laid-off workers most of their pay and benefits while trying to find them jobs elsewhere.

The United Auto Workers union, however, has said that it would work to eliminate job banks at the Detroit Three automakers as a condition of the companies' receiving billions in bridge loans from the federal government.

GM was awarded US$13.4 billion in loans and already has added US$9.4 billion of those funds to its coffers. it expects the rest after February 17, when it must submit a viability plan to the government that includes cuts in operation and labor costs.

Lee wouldn't say if the newly displaced employees at the Lordstown and Delta Township plants would be eligible for the jobs bank, but Fredline said it had been suspended and would be unavailable.

Shares of GM fell 11 cents, or 3.2 percent, to US$3.38 yesterdayday.


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