GM extends summer shutdown at two car plants as request falls
DETROIT (AP) — General Motors is extending the normal two-week summer shutdown for at least two U.S. car factories because of slumping sedan sales.
Union officials say the Lordstown, Ohio, plant near Cleveland and the Fairfax plant in Kansas City, Kansas, will close for as many as five weeks in June and July. The company confirmed that some car factories would be shut down longer than usual but would not give details. Lordstown makes the Chevrolet Cruze compact sedan, while Fairfax builds the Chevrolet Malibu midsize car.
The extra shutdowns come as all automakers fight to deal with a shrinking U.S. market that is dramatically shifting away from cars toward trucks and SUVs of all sizes. Some are continuing to produce cars and selling them to rental car companies or suggesting big discounts to individual buyers while others are cutting production. Through May, U.S. car sales were down eleven percent while truck and SUV sales rose almost five percent, according to Autodata Corp.
Also, overall request for vehicles is slowing after seven years of growth. Total U.S. sales are down two percent through May and many analysts are predicting that full-year sales will slow to 17.Two million, compared with last year’s record of 17.Five million.
Robert Morales, president of a United Auto Workers union local at the Lordstown factory, says the plant will stop production for the last two weeks in June and another three weeks in July. “It’s just to align with market request, that’s all,” he said Wednesday.
The Lordstown plant has about Three,000 hourly and salaried workers. Last year GM suspended the third shift at the plant indefinitely as request dropped. The Fairfax plant has about Three,500 workers.
It was unclear whether other GM plants will see extended summer shutdowns, which normally happen over the July four holiday as factories switch to the next model year.
Spokesman Jim Cain would not comment on specifics of the shutdowns, He did say that GM full-size pickup truck factories also would have longer-than-normal summer shutdowns because they are switching over to an all fresh truck for the two thousand eighteen model year.
Normally workers get most of their pay through unemployment benefits and company subsidies. But that only lasts for about a year.
Cruze sales are up thirty six percent this year due largely to sales to rental car companies and other “fleet” buyers. Sales to individual buyers are down three percent. Malibu sales are down thirty percent through May, including a fifty four percent dip in fleet sales, according to Cain.
GM, he said, is cutting rental car sales even as car sales slump in order to protect profit margins and resale values of its used cars.
According to Ward’s Automotive, GM dealers have enough Cruzes to treat eighty seven days worth of sales, while they have sixty seven days worth of Malibus. Automakers consider a 60-day supply optimal to give customers adequate choices.