Big summer shutdowns loom forAmerican auto plants

Autoworkers may be getting some extra time off around Independence Day, but they won’t be celebrating. They’ll know it means sales are weak and that profits — and profit-sharing checks — could be shrinking.

Manufacturers used to shut plants for a week or two in July for maintenance and to keep inventories in check. As sales boomed in recent years, most factories cranked out cars without a break. This summer, widespread closures may be back, and for weeks longer than before. The reason: four straight months of declining sales and little expectation the trend will reverse anytime soon.

It’s probably not what President Donald Trump wants to hear. He has admonished Ford, General Motors and Toyota for building factories in Mexico and demanded moreU.S. jobs be created, taking credit for some new investments in the U.S. that had been long in the planning.

“You see what’s going on with the car companies,” Trump said in an interview last week. “They’re all talking about building in the United States because of me.”

The reality isn’t so upbeat. “We’re not seeing the same picture as the president,” said MichelleKrebs, a senior analyst with Cox Automotive. “We are not seeing any newplants being built in theUnited States or increases in production. The fact is we have passed the sales peak and we’re now seeing decreases in production.”

None of the major auto- makerswould discuss plans for factory intermissions this summer, saying it was too early to tell what closures might be necessary. Erich Merkle, head of U.S. sales analysis at Ford, said that with the company’s inventories at 83 days worth of vehicles, it may not need to add downtime if the market stayswhere it is.

Even if that happens, weeks of production suspension seem almost certain to be on tap for the industry, said Mark Wakefield, managing director and head of the automotive practice atAlixPartners. He said automakers have aggressive plans for temporarily shuttering assemblies that make slow-selling sedans and small models.

At GM, retooling downtime scheduled at plants this year will reduce output by about 60,000 vehicles, chief financial officer Chuck Stevens said last month. Discussing the chance that big cutbacks might be necessary, he said during a call with analysts Monday that about 30 percent of GM’s factory workers are ”short term” and not eligible for unemployment compensation.

One silver lining: Many passenger cars are now made outside the U.S. and that’s where the big output cuts would probably take place, said Cornell University labor professor Art Wheaton. “I think it will hit Mexico and Canada more than the U.S.,” he said.