No sale? GM to slash production of Buick Enclave
With sales continuing to plunge, General Motors is taking still more steps to bring supply into line with plunging demand. The automaker will slash production at its newest assembly plant, in Delta Township, near Lansing, Michigan, in the face of slow sales of crossover vehicles such as the Buick Enclave.
That move, effective March 30, will be followed by further cuts at GM’s small car plant, in Lordstown, Ohio. That means that the Lordstown plant will move from operating with three shifts to just one, in less than six months time because of falling demand for the Chevrolet Cobalt. After a big push by consumers, in mid-2008, most makers have seen a sharp slump in sales of small cars and fuel-efficient vehicles – notably hybrids.
The cuts at Lansing and Lordstown will put 2,000 GM workers on indefinite layoff. The cuts in Lansing are particularly painful because the crossovers, such as the Enclave, have been heavily advertised and have been described by GM executives as proof GM can build vehicles consumers find desirable.
Both the Lansing and Lordstown plants will operate on a one-shift on and one-shift off pattern, where employees come to work on alternate weeks, until the shifts are actually eliminated. The alternating shifts start February 2 in Lansing and on February 9 in Lordstown, GM officials said.
GM spokeswoman Susan Waun said the latest cuts are part of GM’s effort to bring its sales into line with very low levels of consumer demand. GM had shuttered most of its assembly plants in North America during January and is now projecting that industry volume will reach only an anemic 10.5 million units this year. That’s about 3 million down from all of 2008, and a peak in excess of 17 million early in the decade.
GM President Fritz Henderson last week threw cold water on those who thought that the new year might bring a bit of relief for the industry. Noting sales so far in January have been very weak, he stressed that, “It looks a lot like December.”
Waun said GM also plans to suspend production for short periods at nine different assembly plants in the U.S. and one in Canada during the balance of the first quarter and into the second.
The latest round of production cuts will also be one element of the draft “Viability Plant” GM has to submit to the U.S. Treasury on Feb. 17. The plans must illustrate the steps GM has taken to restore the company to profitability.