The Automaker Was Reported To Eliminate One Of Two Production Shifts In Detroit, Effectively Laying Off 1,300 Employees. However, There Will Be An Overall Production Halt With Its Five Factories.
With a projected elimination of one out of two production shifts in a car plant in Detroit, General Motors Company (NYSE:GM) have told state officials that it has plans to dismiss almost 1,300 workers beginning March 6, 2017.
Nearly half of the affected employees are temporary workers at Detroit-Hamtramck Assembly, which specifically builds the Chevrolet Volt and Impala, Cadillac CT6 and Buick LaCrosse, according to a letter from the carmaker. The letter was to comply with the federal mass-layoff requirements.
“It is possible that placement opportunities in other local GM plants may be available for most, if not all, of the affected GM employees,” wrote the plant’s personnel director, Jeremy Vida.
Spokeswoman Dayna Hart also said that the factories, including Detroit-Hamtramck Assembly, will close anywhere from one to three weeks due to the continuing US market shift toward trucks and SUVs. Over 10,000 workers will be temporarily dismissed.
Temporary Job Dismissal
The layoff stems from its solution to lower increased inventories. The dismissal of about 2,000 jobs due to the suspension of third shifts at the Lordstown and Lansing Grand River plants is already set next month.
Earlier on Monday, GM also said it would be eliminating assembly lines at four plants for three weeks in January as to answer the lower demand for the vehicles they manufacture.
GM is also arranging three weeks of production break at Fairfax Assembly in Kansas City, Kan., two weeks at the Lansing Grand River plant in Michigan and a week in Lordstown, Ohio, and Bowling Green, Ky.
The carmaker verified the plant closures after sources at the United Auto Workers stated that five plants would cease output. Overall, GM is idling the five factories for one to three weeks this coming January.
In an email, Tom Wickham, a spokesman, wrote that: “GM adjusts its manufacturing plants’ production schedules to meet market demand as part of the normal course of business.”
Bloated Inventories
Ideal inventory levels are 60 days, but its 8 models have over 110-days of inventory.
In a report last week, GM’s inventories climbed 28% between August 1 and December 1, to hit the highest level in almost nine years. This had prompted that more production curbs may be required. The automaker started this month with a 111-day supply of the CT6, which went into production in February, and 168-day supply of the LaCrosse, which had been redesigned earlier this 2016.
The Detroit-Hamtramck plant manufactured approximately 170,000 vehicles this year through November, more than double its output in all of the prior year. Meanwhile, the Lordstown plant builds the compact Chevy Cruze, and the Lansing plant manufactures the Chevy Camaro and Cadillac ATS and CTS.
Overall, the automobile company had an 86-day or four months’ worth of supply of the four models in the US on December 1, up from 84 days on November 1 and 70 days a year earlier, according to the Automotive News Data Center.