SHIFT TO SUVS COSTS SOME JOBS

The Denver Post - - BUSINESS - By David Welch and Jamie But­ters

For union­ized auto work­ers, even amid a boom­ing U.S. mar­ket, the only safe jobs of late have been build­ing pick­ups and sport util­ity ve­hi­cles.

Within the next month, Gen­eral Mo­tors plans to cut about 3,300 em­ploy­ees at three car plants, as the largest U.S. au­tomaker slashes pro­duc­tion of mod­els in­clud­ing the Chevro­let Cruze com­pact. The Detroit-based com­pany also plans to tem­po­rar­ily lay off em­ploy­ees across five of its U.S. car fac­to­ries, while Fiat Chrysler Au­to­mo­biles is trim­ming pro­duc­tion at two plants in Canada.

Work­ers are bear­ing the brunt of a shift in con­sumer pref­er­ence to­ward trucks that’s been swift enough to cost them their jobs, even as to­tal U.S. ve­hi­cle sales flirt with last year’s record. With cheap gaso­line spurring de­mand for more fuel ef­fi­cient SUVs and pick­ups, au­tomak­ers have been forced to dial back car out­put to ad­dress swelling in­ven­tory.

“It’s a pen­du­lum and now it’s shift­ing our way,” said Glen John­son, pres­i­dent of United Auto Work­ers Lo­cal 1112 in Lord­stown, Ohio, where 1,200 work­ers mak­ing the Cruze will be dis­missed next month. “It wasn’t that long ago that gas was $3.50 a gal­lon and we were feel­ing for our friends in truck plants.”

GM’s plan to cut 1,300 work­ers at its Detroit-Ham­tramck car plant was dis­closed Mon­day in an of­fi­cial no­tice to the state of Michi­gan. The fac­tory makes the Chevro­let Im­pala, Buick Lacrosse and Cadil­lac CT6 sedans, as well as the Volt plug-in hy­brid.

Ear­lier Mon­day, GM said it was tem­po­rar­ily idling pro­duc­tion at five U.S. pas­sen­ger-car plants, and Fiat Chrysler said it would halt out­put for New Year’s week at two Cana­dian ve­hi­cle fac­to­ries mak­ing Chrysler 300, Dodge Charger and Chal­lenger sedans and Chrysler Paci­fica mini­vans.

“It’s all car plants,” said David Whis­ton, an an­a­lyst for Morn­ingstar Inc. “Com­pact cars and sedans are out of fa­vor, so you have to cut the pro­duc­tion.”

In us­ing shorter-term shut­downs in Jan­uary, GM is try­ing to re­duce in­ven­tory from an al­most 90 days sup­ply to about 70 days by the end of next month, ac­cord­ing to Dayna Hart, a com­pany spokes­woman.

The con­sumer shift from cars to crossovers and trucks “is pro­jected to con­tinue,” Hart said in an email. “We are ad­just­ing stock im­bal­ances.”

Sev­eral of the cars GM is di­al­ing back pro­duc­tion have been re­designed or are new to the mar­ket, in­clud­ing the Buick Lacrosse and Cadil­lac CT6, Whis­ton said. It’s rare for au­tomak­ers to cut pro­duc­tion of re­cently in­tro­duced mod­els be­cause con­sumers usu­ally are keen to buy fresh de­signs, he said.

Fiat Chrysler has stopped mak­ing the Dodge Dart and Chrysler 200 sedans. A Fiat Chrysler fac­tory in Belvidere, Ill., will make its last Jeep Com­pass and Pa­triot mod­els this week and re­tool for Jeep Chero­kee SUV pro­duc­tion, Jodi Tin­son, a com­pany spokes­woman, said in an e-mail.

As au­tomak­ers start to slow as­sem­bly lines, trucks and SUVs con­tinue to sell at record lev­els. In Novem­ber, to­tal light-ve­hi­cle sales rose 3.7 per­cent to 1.38 mil­lion, a record for Novem­ber, ac­cord­ing to re­searcher Au­to­data Corp.

Many cus­tomers who might have other­wise bought a Cruze com­pact are driv­ing home in the Chevro­let Trax small SUV, said Duane Pad­dock, owner of Pad­dock Chevro­let in Buf­falo, N.Y. This year, Cruze sales through Novem­ber have plunged 18 per­cent to 171,552. De­liv­er­ies of the Trax have climbed 23 per­cent to 71,009.

“With the Trax, we’re killing it,” Pad­dock said. “The Cruze and Mal­ibu are great prod­ucts. We’re just see­ing peo­ple go to SUVs.”

The Trax’s suc­cess is pos­i­tive for GM, but not for work­ers in Lord­stown. GM builds the model in Mex­ico.

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