honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Tuesday, April 29, 2008

GM laying off 3,550 workers

By Tom Krisher
Associated Press Auto Writer

DETROIT — The dwindling U.S. auto market and an accelerating shift from trucks to cars has brought grim layoff news to four General Motors Corp. factories.

The company announced yesterday that it plans to cut one shift each at pickup truck and large sport utility vehicle plants in Flint and Pontiac, Mich.; Janesville, Wis.; and Oshawa, Ontario, resulting in about 3,550 layoffs.

The world's largest automaker by sales said the cuts, to take effect this summer, were brought on by weak demand due to high gasoline prices and an economic downturn.

GM said it will make about 88,000 fewer pickups and 50,000 fewer big SUVs this calendar year because of the cuts. The layoffs represent just over 4 percent of GM's hourly manufacturing workforce of about 80,000 in North America.

The announcement came after stock markets closed. GM shares rose 56 cents, or 2.6 percent, to $21.94 yesterday, then lost 3 cents in after-hours trading.

"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," GM North America president Troy Clarke said in a statement.

For about the past three years, the U.S. auto market has been shifting from pickup trucks and SUVs to cars and crossover vehicles, but the trend picked up in recent months due to gas prices that have reached $3.60 per gallon, on average.

GM expects the layoffs to begin July 14 at the Flint, Janesville and Pontiac plants, and Sept. 8 at Oshawa. Most of the factories had already seen layoffs and production cuts due to a parts shortage from a two-month strike at American Axle and Manufacturing Holdings Inc.

GM spokesman Tony Sapienza said the company will eliminate shifts with 750 workers each at Flint and Janesville, 1,150 workers in Pontiac, and 900 workers in Oshawa. Final numbers must be worked out with unions, he said.

Laid-off workers will get unemployment benefits and supplemental pay that total 80 percent of their normal 40-hour gross pay, a GM spokesman said.

GM said pickup sales overall are down 15 percent through March, while sales of large SUVs are off 26 percent.