Print 28 comment(s) - last by blueboy09.. on Apr 26 at 2:38 AM

General Motors announced Thursday that they will be temporarily closing assembly plants this summer for one to nine additional weeks, on top of the company's usual two-week summer closing.

General Motors routinely closes for two weeks in July each year. This year will bring with it extended closings, ranging anywhere from one extra week to nine additional weeks, depending on the assembly plant.

GM announced Thursday that this summer 13 plants are set to temporarily shut down in the U.S. and Mexico, affecting around 24,000 workers, according to the Associated Press. The shutdown, which will enable GM to cut their production output by 190,000 vehicles, will occur as GM attempts to allow its dealers to sell down overstuffed inventories.

Although GM’s inventory is only 12 percent less than it was last year (currently at 767,000 vehicles in U.S. dealer stock), its sales have decreased by close to 50 percent since then.

In a company statement, GM North America President Troy Clarke explained: “While sales have been performing at or close to our plan estimates, and dealer inventories have been reduced accordingly, we want to more closely align inventories with even more conservative market assumptions.”

GM also said that it has been working with auto parts supplier Delphi, to ensure that Delphi’s bankruptcy case does not result in a stalled supply of parts. Although GM offered solutions to Delphi which would “ensure GM’s source of supply under fair and reasonable term,” Delphi and its lenders have declined these terms. Therefore, the shutdown will also give GM time to plan for any problems that may arise from the Delphi case.

The Associated Press offered a statement from GM, explaining the possible consequences of the case; “Without successful resolution of this dispute, it is General Motors’ view that Delphi or its lenders could force GM into an uncontrolled shutdown with severe negative consequences for the U.S. automotive industry.”

Plants will be closed in Texas, Kentucky, Michigan, Indiana, Ohio, Louisiana, Tennessee, Delaware, Missouri and Mexico. The longest shutdown will occur for 11 weeks in Fort Wayne, Indiana and affect approximately 2,600 workers. 

The Associated Press also reported that laid-off hourly workers will be given unemployment benefits along with supplemental pay from GM, which will supply a total around most of their base wages. According to Clarke, salaried workers will also receive a certain amount of income.

The shutdowns will not result in a complete lack of production; certain GM plants will remain active, such as Michigan’s Lansing Delta Township plant, which will carry on with operations during the two-week shutdown.                                                                    

Hosting a total of $13.4 billion in government loans, GM must undergo a difficult restructuring process by June 1, or the company will enter Chapter 11 bankruptcy protection, according to its CEO.

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By TomZ on 4/24/2009 8:56:19 AM , Rating: 2
Actually, temporary summer shutdowns are pretty normal in the auto industry. This is only "news" because of recession and goverment loans.

RE: Normal
By depravedone on 4/24/2009 9:13:54 AM , Rating: 2
These shutdowns, normally only a couple weeks, are definitely news. Several companies in my area that support the auto industry have either gone out of business or made massive reductions in workforce and production hours.

RE: Normal
By mjcutri on 4/24/2009 9:15:40 AM , Rating: 2
Uh, yeah, one week shutdowns are normal in industry, especially steel and automotive, usually around the 4th of July and Christmas, but ELEVEN WEEK shutdowns are definitely NOT normal and are definitely newsworthy. I had heard about the extended shutdowns, but I hadn't heard the final extent of them until now. This would be newsworthy regardless of the gov't loans or the recession...

Come on TomZ, I usually agree with you, but I think you're a bit off on this one.

RE: Normal
By TomZ on 4/24/2009 9:30:28 AM , Rating: 2
There's only one plant that is closing for that long; the others are all much shorter.

RE: Normal
By retrospooty on 4/24/09, Rating: 0
RE: Normal
By Hiawa23 on 4/24/2009 10:17:49 AM , Rating: 1
this news only becaause of GM's economic condition which it has been bleeding for years, probably needed since inventories are just mounting on car lots across America. I hope this helps them reduce their debt load, but they may infact may be months away from some sort of assisted bankruptcy. Give em credit for trying erverything possible to comply with the govt, but somehow I don't see the auto industry turning around in the next couple of months so what happens then? Do they have a realistic longterm plan to fix their company or is this just piece meal, do whatever will keep uncle Sam at bay in the shorterm, meanwhile the same problems are still there that may have lead to the situation they are in now.

“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls

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