GM to extend holiday shutdown, will cut production

By The Canadian Press

DETROIT - General Motors Corp. will extend its holiday shutdown or make other production cuts at five factories - and will close its truck plant in Canada earlier than planned - as the troubled automaker deals with a continued U.S. auto sales slump and fights to stay solvent.

GM said Friday is plans to close the Oshawa, Ont. truck plant in May rather than by the end of next year as originally planned. The company had said in June it would close the pickup truck plant by 2010, with the loss of 2,600 jobs. In addition, GM will slow assembly line speeds at two of the factories.

Chris Buckley, president of Local 222 of the Canadian Auto Workers union, which represents the GM Oshawa workers, said the earlier closure is actually good news for autoworkers because they will work twice as many weeks before the plant shuts down.

"They've informed us that the closure date tentatively now is May," he said in an interview with The Canadian Press."But the original plan was between January '09 to the closure date of July '09, and our members were only going to be at work for six weeks.

"They've changed direction where now we're going to work 13 weeks between January and May, so it does speed up the closure, but our members will be working more than they were originally."

In a related development Friday, GM also announced its car plant in Oshawa will see an additional week of closure starting Jan. 12 on the Chevrolet Impala assembly line. The company is also making changes at other factories that could increase production of some models, all based on a volatile U.S. auto market that has slumped to a 25-year low.

The changes won't be the last as cash-starved GM tries to conserve as much money as possible while awaiting Congressional action on a bailout loan package for Detroit's three automakers.

"Market demand is usually the prevailing criteria," said spokesman Chris Lee. "We're looking at this much more frequently than I've ever seen us as far as making minor adjustments. And I suspect that will be the norm going forward."

GM said it will cancel a down week starting Dec. 8 at its Wentzville, Mo., factory that makes full-size vans, and will keep or restore overtime at factories in Delta Township, Mich., near Lansing; Spring Hill, Tenn.; Arlington, Texas; and Fort Wayne, Ind.

But factories facing cuts include a plant in Lordstown, Ohio, where workers were told that the normal two-week holiday shutdown will be extended until Jan. 20. The sprawling factory complex stamps parts for and assembles the Chevrolet Cobalt and Pontiac G5 small cars.

In addition to changes at the Oshawa car plant, the holiday shutdown will be extended until Jan. 12 at a car-making plant in Orion Township, Mich., near Pontiac, and until Jan. 20 at a car assembly plant in Kansas City, Kan., GM said.

Buckley said "things continue to get worse" for GM and he worried about the future of the 5,000 workers at the Oshawa car plant.

"The only positive thing in regards to our car plant is we still have three shifts, but it's anybody's guess how long that will last based on the market getting softer every month," the Canadian union leader said.

The automaker normally shutters its plants for two weeks around the Christmas and New Year's holidays, reopening them the first week in January. But with U.S. auto sales down 15 per cent and GM sales off 20 per cent for the first nine months of the year, the closings were extended.

Besides the truck plant closure in Oshawa, GM also announced plans earlier to close a transmission plant in the southwestern Ontario city of Windsor in 2010, with the loss of another 1,400 jobs.

The company, which employs about 20,000 people in Canada, also recently imposed temporary layoffs at its car plant in Oshawa, the centre of its Canadian assembly operations.

With the latest cuts, workers will get holiday pay for the first two weeks, then go on layoff and get unemployment benefits and supplemental pay from the company.

At Lordstown, the last scheduled workday will be Dec. 23, although production will start to wind down before that, said Dave Green, president of a United Auto Workers local at the complex.

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 down time," 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 Friday trading, GM shares rose 18 cents to close at US$3.06 on the New York Stock Exchange, a gain of more than six per cent.