Shift to truck sales leads to GM layoffs at car plants
DETROIT — Shifting demand from cars to trucks and SUVs is forcing General Motors to lay off more than 2,000 workers indefinitely at two assembly plants in Ohio and Michigan.
The company said Wednesday it will suspend the third shifts at factories in Lordstown, Ohio, and in Lansing, Mich., because of the market change, which is growing and shows no sign of abating.
About 1,250 workers will be furloughed at the Lordstown plant, which makes the Chevrolet Cruze compact car, starting Jan. 23. Another 840 will be idled at the Lansing Grand River factory, which makes the Chevrolet Camaro muscle car and the Cadillac ATS and CTS luxury cars, when their shifts end Jan. 16.
“It’s supply and demand, and right now the demand is not there for what we have,” said Glenn Johnson, president of a United Auto Workers union at the Lordstown plant east of Cleveland.
Last month, 61.6 percent of U.S. new-vehicle sales were trucks and SUVs, according to Autodata Corp. That’s a record that is likely to be broken, said Jeff Schuster, senior vice president for forecasting at the consulting firm LMC Automotive.
Because of the shift, it’s likely the GM layoffs won’t be the last at auto factories that build only cars in the slowing compact, subcompact and midsize segments, Schuster said.
Americans have been moving away from cars toward trucks and SUVs for several years now as gasoline prices have dropped to near $2 per gallon and the larger vehicles have be- come more efficient. Baby boomers and young people are attracted to smaller SUVs because of their cargo-carrying ability, high seating and visibility.
Sales of the Cruze are down nearly 20 percent this year even though a new version is only in its second year of production. Of the vehicles made in Lansing, ATS and CTS sales each are down 17 percent this year, while Camaro sales are off 9 percent.
GM doesn’t know when the workers will be called back, spokesman Tom Wickham said. Laid-off workers will get supplemental pay and state unemployment benefits that will amount to most of their wages for a year.
General Motors also announced Wednesday that it would invest more than $900 million at a Toledo, Ohio, transmission plant, the Lansing Grand River factory and a casting plant in Bedford, Ind., to prepare for undisclosed new vehicles. The investment will preserve jobs but not create new ones.
Lordstown’s Johnson said the layoffs aren’t the fault of the Cruze, which can get 40 miles per gallon on the highway and recently was named the most reliable compact car by Consumer Reports magazine.
“The whole small-car industry is suffering with the shift,” he said.