Another 1,600 workers at three General Motors Corp. factories will be laid off indefinitely over the next few months as the company tries to control its inventory amid a worsening U.S. sales slump.
About 700 workers at GM’s pickup truck plant in Pontiac will be furloughed starting Feb. 1, while another 500 at the Detroit-Hamtramck sedan factory will be laid off starting Jan. 12, spokesman Chris Lee said Thursday. In addition, 400 workers at a two-seat sports car assembly plant in Wilmington, Del., also will be out of work starting Dec. 8.
Workers were notified of the company’s actions Sept. 29, Lee said.
The Detroit-Hamtramck plant, which makes the Buick Lucerne and Cadillac DTS full-size sedans, already is down to a single daily shift. GM will reduce its assembly line speed from 56 to 38 cars per hour to achieve the layoffs, Lee said.
The Pontiac plant, which makes the Chevrolet Silverado and GMC Sierra pickups, also is operating on one shift and will see its line speed go from 55 trucks to 24 trucks per hour.
In Wilmington, the plant that makes the Pontiac Solstice, Saturn Sky and Opel GT roadsters will go from two shifts per day to one, Lee said.
“We don’t need excess inventory out there,” Lee said. “We adjust up and down to the market. Pickup trucks, as you know, have been impacted, and in this case our large luxuries have been impacted and the small two-seater niche products as well.”
Lee said the company plans no further plant announcements at this time.
Inventory for the most of the vehicles produced at the plants was near a normal level at the end of September, according to Ward’s AutoInfoBank. GM had a 50- to 85-day supply of all but the Soltice, which was at 155 days.
Diane Elnick, an industry analyst for Ward’s, said GM may be downsizing in anticipation of a continued sales slump.
She said she is surprised GM would cut further at the Pontiac plant because it was already down to a bare-bones single shift.
Analysts say it is inefficient to operate a factory on one shift, much less at low assembly line speeds. They also have said GM may need to close more pickup truck and sport-utility vehicle plants beyond the four announced in June.
“They have other plants to build those trucks,” Elnick said. “I can certainly understand why they wouldn’t want to keep multiple plants open that are building the same vehicles. And unfortunately with trucks that’s the case.”
Brian Larkin, vice president of UAW Local 594 at the Pontiac plant, said the factory has about 350 entry-level employees who are concerned about their jobs, but he hopes a recent uptick in truck sales will keep jobs at the plant.
“We’re hoping the economy picks up to where the truck sales take off again,” said the 53-year-old Larkin, a 35-year GM employee. “I believe they are starting to see truck sales go up with gas prices going down.”
George McGregor, president of United Auto Workers Local 22 at the Detroit-Hamtramck plant, said the union has known about the layoffs for a while, but didn’t know the exact number.
“We don’t know when the return date will be. We are just holding on,” said the 62-year-old, who has been a GM employee for 41 years.
McGregor’s plant, which employs 1,500 hourly workers, is slated to build the Chevrolet Volt, GM’s electric car with a small gas engine to extend its range. The Volt is due in showrooms in late 2010, but McGregor said the union is not sure when production will start.
During the layoff, workers will get close to full pay and benefits through supplemental pay and state unemployment. After 48 weeks they go into a jobs bank in which the company pays 85 percent of their salaries, plus benefits. Within two years, the workers could lose pay and benefits if they don’t transfer to another plant.
GM said the Pontiac truck plant has 1,200 hourly workers; the Wilmington factory has 1,100.
The automaker announced Monday that it would shutter its metal parts stamping factory near Grand Rapids by the end of 2009, costing 1,520 jobs. It also sped up the end of SUV production at its Janesville, Wis., plant to Dec. 23, eliminating another 1,200 positions.
U.S. sales overall are down 13 percent for the first nine months of 2008, with predictions that automakers will sell 2 million fewer vehicles than they did last year.
GM is burning through more than $1 billion in cash per month and analysts say it may reach the minimum amount of money to run the company sometime next year. GM’s sales are down 18 percent, and the company has lost $57.5 billion in the past 18 months, largely because of tax accounting changes.