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General Motors Co. said it plans to eliminate a production shift at a Michigan factory starting in March, resulting in layoffs for about 1,300 workers as demand for passenger cars slows.

The announcement, contained in an official notice to the state of Michigan, goes a step beyond temporary production cuts for January that both GM and Fiat Chrysler Automobiles NV disclosed earlier Monday. Detroit-based GM said eliminating the second shift at Hamtramck will affect 493 regular production employees, 638 temporary workers, and others covered by United Auto Workers. About 30 salaried workers will transfer to other plants.

The automakers are acting to reduce swelling inventories as Americans turn away from sedans and other passenger cars, choosing instead to buy sport utility vehicles and light trucks. GM said earlier Monday it was idling some production at five U.S. passenger-car plants in January, and Fiat Chrysler said it’s halting output for New Year’s week at two Canadian vehicle factories.

“It’s all car plants,” said David Whiston, an analyst for Morningstar Inc. “Compact cars and sedans are out of favor.”

Using shorter term shutdowns in January, GM is trying to cut its inventories from almost 90 days’ worth of vehicles as of November to a more customary supply of 70 days at the end of the month, a company spokesman said. Those idlings will occur in Hamtramck; Bowling Green, Kentucky; and the Fairfax industrial district of Kansas City, Kansas. GM will also temporarily shut plants in Michigan and Ohio that had previously cut a shift each; those factories make the Chevy Cruze compact and Chevy Camaro sports car.

The Hamtramck factory makes the Chevrolet Impala and Volt, Buick Lacrosse and Cadillac CT6 sedans. Workers at Fairfax assembles the Lacrosse and new Chevy Malibu, and Bowling Green builds the Corvette.

GM’s shares ticked up 0.1 percent Monday to close at $36.40 in New York. Fiat Chrysler rose 0.7 percent to $8.86, its highest closing price since Jan. 5. Ford gained 0.2 percent to $12.66.

Fiat Chrysler Closings

Fiat Chrysler said it is adding four off days to the Jan. 2 observation of New Year’s at its minivan assembly plant in Windsor, Ontario, and its large-car facility in Brampton, Ontario. The moves are to align production with demand, spokeswoman Jodi Tinson said in an e-mail. The automaker has already stopped making the Dodge Dart and Chrysler 200 sedans.

A factory in Belvidere, Illinois, will make its last Jeep Compass and Patriot models this week, allowing retooling for Cherokee production, she said.

Ford Motor Co. said in October that it was cutting production at plants that make the Escape small SUV and F-150 pickup in the face of slowing sales.

While automakers are starting 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, researcher Autodata Corp. reported. The month’s annual sales rate, adjusted for two extra selling days this November, was 17.9 million vehicles — more than the 17.7 million average estimate.

To contact the reporters on this story: David Welch in Southfield at dwelch12@bloomberg.net, Jamie Butters in Southfield, Michigan, at jbutters@bloomberg.net. To contact the editors responsible for this story: Kevin Miller at kmiller@bloomberg.net.

 

Source:  MSM