Another GM Factory Idled, Workers Laid Off as Automaker Cuts Output
Hundreds of factory workers will lose their jobs right before Christmas as America’s largest automaker shares plans to idle another factory.
General Motors Company (NYSE:GM) is temporarily shutting down one of its factories in Detroit, leaving hundreds of factory workers out of work. Even after the temporary shutdown is over, only part of the production capacity will be brought back on, which means many of the temporary layoffs will eventually be made permanent.
By mid-November, General Motors is going to idle its assembly plant located on the border of Detroit and Hamtramck. The Detroit-Hamtramck assembly plant will be out of production for a period of six weeks.
About 1,500 employees at the plant will be affected in the temporary shutdown right before Christmas, while about 200 of these workers may permanently lose their jobs, even when the plant gets back into production. That’s because General Motors is planning to permanently reduce production at the plant by about 20%.
The decision follows as the auto industry sees demand cooling off after boasting stellar sales in 2016. In particular, demand for passenger cars has been waning as American consumer tastes begin to shift towards bigger cars offering more utility. American consumers are preferring to buy sports utility vehicles, crossovers, and semi-trucks over sedans.
The three-decade-old Detroit-Hamtramck factory is known for producing two passenger cars: the small hybrid “Chevrolet Volt” and the bigger luxury sedan, the “Cadillac CT6.” Demand for these cars has cratered, forcing General Motors to scale back production in order to avoid unsold car inventories from building up.
The latest plant idling follows a series of factory shutdowns that have been going on since the beginning of this year at various General Motors plants across the country. Just last month, General Motors eliminated a shift at its assembly plant Spring Hill, Tennessee, a move which affected over 600 jobs. And earlier during the summer, General Motors also extended temporary shutdowns at two of its factories as it saw inventories piling up at its dealerships, leaving hundreds of workers out of a job.
The sad reality is that all three of the major U.S. automakers—GM, Ford Motor Company (NYSE:F), and Fiat Chrysler Automobiles NV (NYSE:FCAU)—have been killing factory jobs as they laid off workers following output cutbacks.
The sales slowdown in the auto industry has remaining factory workers worried that their jobs may be the next to face cuts as America’s biggest automakers continue to slash output.
“GM to Idle Detroit Car Factory Amid Slow Demand,” The Wall Street Journal, October 12, 2017.