GM cuts jobs and Truck/SUV production

April 29, 2008
With Demand Slipping for Its Pickups and S.U.V.’s, G.M. Will Lay Off 3,550

By NICK BUNKLEY
DETROIT — General Motors said Monday that it would slash production of big trucks and sport utility vehicles by nearly 140,000 units this year, a move that would eliminate assembly shifts at four plants and cause about 3,550 workers to be laid off.
G.M., the world’s largest automaker, has gradually slowed production of many vehicles because of declining demand, but this is the largest one-time cut in recent years.
G.M.’s need to make such a large cut, even after many of its truck and S.U.V. plants have been shut down for much of March and April because of a strike at a parts supplier, indicates how sharply sales of these vehicles have fallen.
Sales of G.M.’s full-size pickups, the Chevrolet Silverado and GMC Sierra, which were redesigned for the 2007 model year, fell 16 percent in the first quarter of this year, according to Autodata, which tracks industry statistics. Sales of G.M.’s large S.U.V.’s were down 28 percent in the same period.
The declines mirror overall decreases in those segments for the industry, but G.M., the top player in both segments, has been hurt the most by the rapid shift in consumers’ preferences.
The announcement came on a day when the national average price of regular gasoline hit a high of $3.603 a gallon and a slumping housing market continued to cause a decline in demand for trucks.
“With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities,†the president of G.M.’s North American operations, Troy Clarke, said in a statement.
“This is a difficult move,†he said, “but we remain committed to retaining and growing our leadership position in the full-size truck market.â€
One of two shifts will be eliminated on July 14 at a plant in Janesville, Wis., that builds the Chevrolet Tahoe and Suburban and GMC Yukon S.U.V.’s and at a full-size pickup truck plant in the Detroit suburb of Pontiac, G.M. said. Also on July 14, one of three shifts will be cut at a plant in Flint, Mich., that builds heavy-duty pickup trucks, and a pickup plant in Oshawa, Ontario, will go to one shift from two on Sept. 8.
G.M. said the cuts would reduce truck production by 88,000 units, about 11 percent of its total full-size truck sales in 2007. The planned 50,000 cut in S.U.V. production represents about 15 percent of its sales last year in that segment.