Ailing automaker to cut 30,000 job cuts by 2008, close 9 plants
NewsGeneral Motors Corp. (GM) announced plans this week to close nine North American plants and cut 30,000 hourly jobs by 2008. The closures and job cuts are part of a plan to turn around the fortunes of a company that has lost $4 billion this year and continues to lose ground in the North American market. Many automotive industry analysts believe that the losses stem from rising costs in health care, materials, and a decline in SUV sales, a segment in which General Motors has invested heavily over the past five or more years. Also plaguing GM is the perception of poor quality in comparison to its import competitors. According to an Autobytel Quick Poll, 60 percent of respondents would not buy a car from GM, Ford or Chrysler without a rebate, and 36 percent felt that GM, along with Chrysler and Ford, would improve sales if the automakers improved quality. "The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," said GM Chairman and CEO Rick Wagoner, in a broadcast to employees. "But these actions are necessary for GM to get its costs in line with our major global competitors. In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible."
Plants scheduled to close include the Oklahoma City, Okla., assembly plant, which will be shuttered in early 2006 and builds the Chevrolet TrailBlazer EXT, GMC Envoy XL, and Isuzu Ascender; Line No. 1 at the Spring Hill, Tenn., plant by the end of 2006, which builds Saturn vehicles; the Doraville, Ga., line, which builds GM minivans and will close at the end of its current product life cycle in 2008; the Lansing, Mich., Craft Centre in mid-2006, where GM builds the Chevrolet SSR; and Oshawa, Ont., Car Plant No. 2, which will close at the end of its vehicle life cycle in 2008. Oshawa's Car Plant No. 1, which was named North America's most productive vehicle assembly plant by the Harbour Report, will lose its third shift as well -- Oshawa No. 1 builds slow-selling mid-sized cars such as the Pontiac Grand Prix.
Also dropped will be the third shift at the Moraine, Ohio assembly plant, which builds mid-sized SUVs and was also named in the 2005 Harbour Report for productivity. Other facilities include the Lansing, Mich., Metal Center, which will close in 2006; the Pittsburgh, Pa., Metal Center, to close in 2007; a Parts Distribution Center in Portland, Ore., to close in 2006; a Parts Processing Center in Ypsilanti, Mich., in 2007; the St. Catharines Ontario Street West powertrain components facility in Ontario, Canada, to close in 2008; and the Flint, Mich., North 3800 engine facility, in 2008.
In a published response to GM cuts, UAW President Ron Gettelfinger and Vice President Richard Shoemaker expressed dismay over the moves, saying that "Today's action by General Motors is not only extremely disappointing, unfair and unfortunate, it is devastating to many thousands of workers, their families and their communities. While GM's continuing decline in market share is not the fault of workers or our communities, it is these groups that will suffer because of the actions announced today."