General Motors Corp. said on Dec. 5 it plans to idle another 2,000 workers at plants in Canada and the United States amid a sharp drop-off in demand for new cars. The cuts come in addition to the 2,000 job cuts announced in early November at the plants in Michigan, Ohio and Oshawa, Ontario.
The company had said on Dec. 2 it plans to cut up to 31,500 jobs by 2010 -- or a third of its workforce - as part of a restructuring plan aimed at winning $18 billion in government-backed loans.
GM Chairman Richard Wagoner has warned the automaker will run out of cash without government help and is testifying on Capitol Hill today along with top executives from Ford and Chrysler, who are also seeking billions in assistance.
GM had added a third shift at the Orion, Michigan and Lordstown, Ohio plants in August in response to a "significant spike in demand for the fuel-efficient cars built at those plants," said GM spokesman Chris Lee.
"Unfortunately, with the credit crunch and everything else going on in the market, we had to adjust again," Lee said, noting the sales for the entire industry were down 37% last month.
GM's sales dropped 41% in November after falling more than 40% in October. Sales in December also are expected to be weak, according to J.D. Power analyst Tom Libbey.
The current plans now call for idling 4,000 workers at the three plants by the beginning of February. Both the Lordstown and Orion plant will also be shut completely during the month of January, said.
GM will also idle its car assembly plant in Fairfax, Kansas for an additional week, leaving it shuttered for three of the four weeks next month.
"When gasoline prices spiked earlier in the year, we had adjusted the truck production," downward, Lee said. "Now we're adjusting car production."
Copyright Agence France-Presse, 2008