GM "Idles" 900 workers
10-24-2004, 08:58 PM
#1
TECH Addict
Thread Starter
Join Date: Nov 2001
Location: Atlanta, GA
Posts: 2,390
Likes: 0
Received 0 Likes
on
0 Posts
GM "Idles" 900 workers UGH! I'm getting worried about the General here..... Massive incentives, Massive rebates, huge lay-offs..... it's sort of like working in Telco.
From the Detroit News
http://www.detnews.com/2004/autosins...a01-309392.htm
From the Detroit News
http://www.detnews.com/2004/autosins...a01-309392.htm
GM idles 900 here Automaker to end third shift at its Pontiac truck plant in January to trim inventories
By Ed Garsten / The Detroit News
General Motors Corp. will lay off 900 factory workers when it eliminates the third production shift at its Pontiac truck assembly plant in January, the automaker told employees Tuesday.
The workers will be laid off, offered transfers to other company plants or given the option of retiring, if eligible, GM said.
The move comes as GM steps up cost-cutting efforts to reverse an unexpected loss in its North American automotive business. Because of slow sales, GM also idled a Saturn plant in Spring Hill, Tenn., that makes the Ion.
New car and truck sales in North America are up just 1.3 percent this year despite deep incentives. GM cut fourth-quarter production in North America to trim inventories.
In North America, GM reported a third-quarter loss of $22 million compared to profits of $128 million a year ago. It also lowered its 2004 earnings forecasts to $6 to $6.50 a share, down from a previous target of $7 a share.
The Pontiac plant employs about 3,500 workers and is one of four North American factories that build the Chevrolet Silverado and GMC Sierra full-size pickups.
“This was a market-driven decision,” GM spokesman Dan Flores said. “It’s better to align the plant’s output with current and forecast market demand for the products built in Pontiac.”
Demand for the Sierra is up 9.9 percent this year, and sales of the Silverado have climbed 1.9 percent compared with last year.
But the bulk of sales have been for crew cab models that are not produced at the Pontiac plant.
The full-size pickup segment has grown more competitive with the introduction last year of the Nissan Titan and redesigned versions of market leader Ford F-150 and the Dodge Ram, along with increasing popularity of the Toyota Tundra.
GM is offering steep discounts to spur sales. Chevrolet is offering cash rebates ranging from $2,000 to $3,000 on Silverado models.
A third production shift was added to the Pontiac truck plant in the fall of 2002 in response to strong demand for the pickups, Flores said.
There is no timetable for when or if the shift will be reinstated, he said.
David Cole, who heads the Ann Arbor-based Center for Automotive Research, says dropping the shift isn’t a sign a major restructuring in the offing for GM, but more of a “fine-tuning” in light of market and economic conditions.
“It’s more a combination of competitive pressures plus very high gas prices,” Cole said. “But taking a shift out is not a signal of a trend.”
Officials with United Auto Workers Local 594, which represents hourly employees at the plant, were unavailable for comment.
Under an agreement between GM and the UAW, laid-off workers will receive 95 percent of their pay for an extended period. During negotiations in 2003 with the union, GM agreed to set aside millions of dollars to provide supplemental income to workers idled by plant closings and production cuts.
The Pontiac plant produced 301,000 vehicles in 2003, up 29 percent from 2002. But GM has trimmed output at the factory by about 7 percent this year in response to slow sales.
The automaker said Friday that it would shut down its Saginaw Malleable Iron foundry before the national contract between GM and the UAW expires Sept. 14, 2007.
That announcement came one day after GM said it was cutting 12,000 jobs in Europe by the end of 2006. GM’s bid to cut jobs at its money-losing Opel, Vauxhall and Saab operations is aimed at saving about $620 million a year.
In Spring Hill, Tenn., GM has once again idled its small-car assembly line, despite plans to spend nearly $3 billion to almost double sales at its Saturn division in the next three years. The two-week shutdown of the Ion model production line comes about a month after the the company pared the Ion assembly team from three shifts to two. Sales have failed to meet expectations.
By Ed Garsten / The Detroit News
General Motors Corp. will lay off 900 factory workers when it eliminates the third production shift at its Pontiac truck assembly plant in January, the automaker told employees Tuesday.
The workers will be laid off, offered transfers to other company plants or given the option of retiring, if eligible, GM said.
The move comes as GM steps up cost-cutting efforts to reverse an unexpected loss in its North American automotive business. Because of slow sales, GM also idled a Saturn plant in Spring Hill, Tenn., that makes the Ion.
New car and truck sales in North America are up just 1.3 percent this year despite deep incentives. GM cut fourth-quarter production in North America to trim inventories.
In North America, GM reported a third-quarter loss of $22 million compared to profits of $128 million a year ago. It also lowered its 2004 earnings forecasts to $6 to $6.50 a share, down from a previous target of $7 a share.
The Pontiac plant employs about 3,500 workers and is one of four North American factories that build the Chevrolet Silverado and GMC Sierra full-size pickups.
“This was a market-driven decision,” GM spokesman Dan Flores said. “It’s better to align the plant’s output with current and forecast market demand for the products built in Pontiac.”
Demand for the Sierra is up 9.9 percent this year, and sales of the Silverado have climbed 1.9 percent compared with last year.
But the bulk of sales have been for crew cab models that are not produced at the Pontiac plant.
The full-size pickup segment has grown more competitive with the introduction last year of the Nissan Titan and redesigned versions of market leader Ford F-150 and the Dodge Ram, along with increasing popularity of the Toyota Tundra.
GM is offering steep discounts to spur sales. Chevrolet is offering cash rebates ranging from $2,000 to $3,000 on Silverado models.
A third production shift was added to the Pontiac truck plant in the fall of 2002 in response to strong demand for the pickups, Flores said.
There is no timetable for when or if the shift will be reinstated, he said.
David Cole, who heads the Ann Arbor-based Center for Automotive Research, says dropping the shift isn’t a sign a major restructuring in the offing for GM, but more of a “fine-tuning” in light of market and economic conditions.
“It’s more a combination of competitive pressures plus very high gas prices,” Cole said. “But taking a shift out is not a signal of a trend.”
Officials with United Auto Workers Local 594, which represents hourly employees at the plant, were unavailable for comment.
Under an agreement between GM and the UAW, laid-off workers will receive 95 percent of their pay for an extended period. During negotiations in 2003 with the union, GM agreed to set aside millions of dollars to provide supplemental income to workers idled by plant closings and production cuts.
The Pontiac plant produced 301,000 vehicles in 2003, up 29 percent from 2002. But GM has trimmed output at the factory by about 7 percent this year in response to slow sales.
The automaker said Friday that it would shut down its Saginaw Malleable Iron foundry before the national contract between GM and the UAW expires Sept. 14, 2007.
That announcement came one day after GM said it was cutting 12,000 jobs in Europe by the end of 2006. GM’s bid to cut jobs at its money-losing Opel, Vauxhall and Saab operations is aimed at saving about $620 million a year.
In Spring Hill, Tenn., GM has once again idled its small-car assembly line, despite plans to spend nearly $3 billion to almost double sales at its Saturn division in the next three years. The two-week shutdown of the Ion model production line comes about a month after the the company pared the Ion assembly team from three shifts to two. Sales have failed to meet expectations.
