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10-28-2004, 10:28 PM
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Hummer Guru
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<H2>More GM layoffs point to slow sales </H2>
BY SARAH A. WEBSTER
<SPAN
style="FONT-SIZE: xx-small; FONT-FAMILY: Arial,Helvetica,sans-serif">FREE PRESS
BUSINESS WRITER</SPAN>
October 28, 2004</P>
General Motors Corp. has told more than 9,000 workers at five plants that
primarily make SUVs and pickups that they will be laid off for a week or more
early next year as the company continues to reduce production of its vehicles.
That is in addition to the indefinite layoff of 900 workers in Pontiac
disclosed by GM last week.
GM's decision to tell workers about production slowdowns more than two months
before the start of the new year seems to signal that the automaker is nervous
about the upcoming sales year and its inventory levels, after reporting
disappointing earnings results in the third quarter.
The world's largest automaker is scheduled to announce its first-quarter
production forecast to the public in December. That's when the full scope of its
cutbacks for the first three months of the year will become clear. While the
five plants are on shutdown, hourly workers will see their pay drop about 30-35
percent. The shutdowns will follow the normal holiday breaks.
GM spokesman Dan Flores said the cutbacks are a market-driven decision to
bring production in line with "market forecasts and current demand," and he
noted the automaker is also increasing manufacturing at some plants. On
Wednesday, GM announced it is investing about $250 million in its Shreveport,
La., truck assembly plant to produce the Hummer H3 SUV.
However, it's clear that demand for some of GM's most profitable pickups and
SUVs is waning because they are at the end of their model lives. Rising gas
prices may also be discouraging some consumers from buying bigger vehicles.
GM management has already told hourly workers about changes at the following
plants:
• Pontiac Assembly, which builds the Chevrolet Silverado and GMC Sierra
pickups. In January, GM will eliminate a third shift at the plant, which employs
5,200 hourly workers, causing the layoff of about 900 employees.
• Arlington Assembly in Arlington, Texas, which builds the Cadillac Escalade,
Chevrolet Suburban, Chevrolet Tahoe, GMC Yukon and GMC Yukon XL. The plant,
which employs 2,634 hourly workers, will have extended downtime during the weeks
of Jan. 3, Jan. 10 and March 14.
• Janesville Assembly in Janesville, Wis., which builds the Chevrolet Tahoe,
Chevrolet Suburban, GMC Yukon and GMC Yukon XL. The plant, which employs 3,180
hourly workers, will have extended downtime the weeks of Jan. 3, March 21, March
28 and April 4.
• Lansing Craft Centre, which builds the Chevrolet SSR pickup. The plant,
which employs about 300 hourly workers, will have extended downtime the week of
Jan. 3.
• Lansing Car Assembly, which builds the Pontiac Grand Am and Chevrolet
Classic, the previous version of the Malibu. The plant, which employs about
2,170 hourly workers, will have extended downtime the week of Jan. 3.
• Oklahoma City Assembly, which builds the GMC Envoy XL, GMC Envoy XUV and
Chevrolet Trailblazer EXT. The plant, which employs 2,427 workers, will have
extended downtime the weeks of Jan. 3 and Jan. 10.
On Jan. 17, the plant will reopen with a slower line speed, a move that is
expected to result in longer-term job reductions. Flores said the size of any
potential layoff in Oklahoma City is not yet clear.
"We're still working those issues out," Flores said. "There will be some
impact."
Nevertheless, management told employees that the line speed in Oklahoma City
will be reduced by 24 percent -- from about 42 vehicles per hour to 32 -- and
that 567 workers would be laid off, according to one assembly worker who did not
want to be identified.
<H3>Seniority counts</H3>
Based on the UAW contract, employees must be selected for layoff according to
seniority, so that workers with the least amount of time with the company would
be the first laid off.
Under the UAW contract, workers who are temporarily laid off should get 95
percent of their usual take-home pay once unemployment and supplemental pay are
combined. That amount is then taxed, which means workers would actually bring
home 65-70 percent of normal pay. Some of those workers could also be moved into
a so-called jobs bank, where they get full pay until they find a new job.
GM's latest production cuts come on top of production declines GM is already
making in the final months of this year.
In September, GM said it would build 95,000 fewer cars and trucks in the last
three months of 2004 than it did in the last quarter of 2003, when it built 1.39
million vehicles. Earlier this month, GM revised that projection downward by
10,000 more vehicles, saying it would build a total of 1.28 million cars and
trucks this quarter.
But that 8-percent cutback in the final quarter apparently won't trim
inventory levels enough to meet the automaker's internal projections of current
and future demand for its products, which seems to be shrinking.
David Healy, an auto analyst with Burnham Securities, said GM will probably
end the year with excess inventory, despite its production cuts and aggressive
incentives, which now top $4,300 per vehicle, according to Autodata Corp. of
Woodcliff Lake, N.J. He expects GM to end 2004 with 1.2 million vehicles on
hand, probably 100,000 more than the automaker wants.
"They, frankly, built too many cars in the first half of 2004, and I don't
think the inventory reduction process will be finished" by the end of the year,
Healy said. Despite the production cuts, Healy expects GM will continue to
enhance its incentive programs for the remaining months of the year.
Michael Robinet, vice president of global forecasting services for CSM
Worldwide, a Farmington Hills-based auto-research firm, said GM needed to reduce
production because while pickups and SUVs remain popular, their sales aren't
growing as fast as they once were.
Truck sales, which ballooned over the past two decades and now represent
about 55 percent of the new-vehicle market, are stabilizing as cars disguised as
SUVs become more popular, Robinet said. Those so-called crossover vehicles
include products like the recently released Ford Freestyle.
What's more, there are more competitors in the truck segment, causing
companies that have traditionally dominated the pickup, SUV and minivan
categories to lose sales.
"I think what you're going to find is that Big Three manufacturers are
experiencing some issues with sport utilities," Robinet said. A lot of the truck
growth, he added, "has essentially dwindled off."
Overall, consumer demand for cars and trucks has been growing this year. The
market for cars and light trucks has increased by a combined 1.3 percent this
year, with 12.8 million vehicles sold through September. But GM's share of that
market has dropped one-tenth of a percentage point this year, to 27.9 percent.
Some analysts are predicting a slowdown in auto sales this month after
consumer confidence numbers declined in September and October.
</P>
Contact <SPAN class=b>SARAH A. WEBSTER</SPAN> at 313-222-5394 or
swebster@freepress.com.</P>
<P align=center> Copyright © 2004 Detroit Free Press
Inc.</P></BODY></HTML>
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10-28-2004, 10:28 PM
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Hummer Guru
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Join Date: Nov 2002
Location: CSA
Posts: 2,511
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<H2>More GM layoffs point to slow sales </H2>
BY SARAH A. WEBSTER
<SPAN
style="FONT-SIZE: xx-small; FONT-FAMILY: Arial,Helvetica,sans-serif">FREE PRESS
BUSINESS WRITER</SPAN>
October 28, 2004</P>
General Motors Corp. has told more than 9,000 workers at five plants that
primarily make SUVs and pickups that they will be laid off for a week or more
early next year as the company continues to reduce production of its vehicles.
That is in addition to the indefinite layoff of 900 workers in Pontiac
disclosed by GM last week.
GM's decision to tell workers about production slowdowns more than two months
before the start of the new year seems to signal that the automaker is nervous
about the upcoming sales year and its inventory levels, after reporting
disappointing earnings results in the third quarter.
The world's largest automaker is scheduled to announce its first-quarter
production forecast to the public in December. That's when the full scope of its
cutbacks for the first three months of the year will become clear. While the
five plants are on shutdown, hourly workers will see their pay drop about 30-35
percent. The shutdowns will follow the normal holiday breaks.
GM spokesman Dan Flores said the cutbacks are a market-driven decision to
bring production in line with "market forecasts and current demand," and he
noted the automaker is also increasing manufacturing at some plants. On
Wednesday, GM announced it is investing about $250 million in its Shreveport,
La., truck assembly plant to produce the Hummer H3 SUV.
However, it's clear that demand for some of GM's most profitable pickups and
SUVs is waning because they are at the end of their model lives. Rising gas
prices may also be discouraging some consumers from buying bigger vehicles.
GM management has already told hourly workers about changes at the following
plants:
• Pontiac Assembly, which builds the Chevrolet Silverado and GMC Sierra
pickups. In January, GM will eliminate a third shift at the plant, which employs
5,200 hourly workers, causing the layoff of about 900 employees.
• Arlington Assembly in Arlington, Texas, which builds the Cadillac Escalade,
Chevrolet Suburban, Chevrolet Tahoe, GMC Yukon and GMC Yukon XL. The plant,
which employs 2,634 hourly workers, will have extended downtime during the weeks
of Jan. 3, Jan. 10 and March 14.
• Janesville Assembly in Janesville, Wis., which builds the Chevrolet Tahoe,
Chevrolet Suburban, GMC Yukon and GMC Yukon XL. The plant, which employs 3,180
hourly workers, will have extended downtime the weeks of Jan. 3, March 21, March
28 and April 4.
• Lansing Craft Centre, which builds the Chevrolet SSR pickup. The plant,
which employs about 300 hourly workers, will have extended downtime the week of
Jan. 3.
• Lansing Car Assembly, which builds the Pontiac Grand Am and Chevrolet
Classic, the previous version of the Malibu. The plant, which employs about
2,170 hourly workers, will have extended downtime the week of Jan. 3.
• Oklahoma City Assembly, which builds the GMC Envoy XL, GMC Envoy XUV and
Chevrolet Trailblazer EXT. The plant, which employs 2,427 workers, will have
extended downtime the weeks of Jan. 3 and Jan. 10.
On Jan. 17, the plant will reopen with a slower line speed, a move that is
expected to result in longer-term job reductions. Flores said the size of any
potential layoff in Oklahoma City is not yet clear.
"We're still working those issues out," Flores said. "There will be some
impact."
Nevertheless, management told employees that the line speed in Oklahoma City
will be reduced by 24 percent -- from about 42 vehicles per hour to 32 -- and
that 567 workers would be laid off, according to one assembly worker who did not
want to be identified.
<H3>Seniority counts</H3>
Based on the UAW contract, employees must be selected for layoff according to
seniority, so that workers with the least amount of time with the company would
be the first laid off.
Under the UAW contract, workers who are temporarily laid off should get 95
percent of their usual take-home pay once unemployment and supplemental pay are
combined. That amount is then taxed, which means workers would actually bring
home 65-70 percent of normal pay. Some of those workers could also be moved into
a so-called jobs bank, where they get full pay until they find a new job.
GM's latest production cuts come on top of production declines GM is already
making in the final months of this year.
In September, GM said it would build 95,000 fewer cars and trucks in the last
three months of 2004 than it did in the last quarter of 2003, when it built 1.39
million vehicles. Earlier this month, GM revised that projection downward by
10,000 more vehicles, saying it would build a total of 1.28 million cars and
trucks this quarter.
But that 8-percent cutback in the final quarter apparently won't trim
inventory levels enough to meet the automaker's internal projections of current
and future demand for its products, which seems to be shrinking.
David Healy, an auto analyst with Burnham Securities, said GM will probably
end the year with excess inventory, despite its production cuts and aggressive
incentives, which now top $4,300 per vehicle, according to Autodata Corp. of
Woodcliff Lake, N.J. He expects GM to end 2004 with 1.2 million vehicles on
hand, probably 100,000 more than the automaker wants.
"They, frankly, built too many cars in the first half of 2004, and I don't
think the inventory reduction process will be finished" by the end of the year,
Healy said. Despite the production cuts, Healy expects GM will continue to
enhance its incentive programs for the remaining months of the year.
Michael Robinet, vice president of global forecasting services for CSM
Worldwide, a Farmington Hills-based auto-research firm, said GM needed to reduce
production because while pickups and SUVs remain popular, their sales aren't
growing as fast as they once were.
Truck sales, which ballooned over the past two decades and now represent
about 55 percent of the new-vehicle market, are stabilizing as cars disguised as
SUVs become more popular, Robinet said. Those so-called crossover vehicles
include products like the recently released Ford Freestyle.
What's more, there are more competitors in the truck segment, causing
companies that have traditionally dominated the pickup, SUV and minivan
categories to lose sales.
"I think what you're going to find is that Big Three manufacturers are
experiencing some issues with sport utilities," Robinet said. A lot of the truck
growth, he added, "has essentially dwindled off."
Overall, consumer demand for cars and trucks has been growing this year. The
market for cars and light trucks has increased by a combined 1.3 percent this
year, with 12.8 million vehicles sold through September. But GM's share of that
market has dropped one-tenth of a percentage point this year, to 27.9 percent.
Some analysts are predicting a slowdown in auto sales this month after
consumer confidence numbers declined in September and October.
</P>
Contact <SPAN class=b>SARAH A. WEBSTER</SPAN> at 313-222-5394 or
swebster@freepress.com.</P>
<P align=center> Copyright © 2004 Detroit Free Press
Inc.</P></BODY></HTML>
|
10-28-2004, 10:28 PM
|
|
Hummer Guru
|
|
Join Date: Nov 2002
Location: CSA
Posts: 2,511
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<H2>More GM layoffs point to slow sales </H2>
BY SARAH A. WEBSTER
<SPAN
style="FONT-SIZE: xx-small; FONT-FAMILY: Arial,Helvetica,sans-serif">FREE PRESS
BUSINESS WRITER</SPAN>
October 28, 2004</P>
General Motors Corp. has told more than 9,000 workers at five plants that
primarily make SUVs and pickups that they will be laid off for a week or more
early next year as the company continues to reduce production of its vehicles.
That is in addition to the indefinite layoff of 900 workers in Pontiac
disclosed by GM last week.
GM's decision to tell workers about production slowdowns more than two months
before the start of the new year seems to signal that the automaker is nervous
about the upcoming sales year and its inventory levels, after reporting
disappointing earnings results in the third quarter.
The world's largest automaker is scheduled to announce its first-quarter
production forecast to the public in December. That's when the full scope of its
cutbacks for the first three months of the year will become clear. While the
five plants are on shutdown, hourly workers will see their pay drop about 30-35
percent. The shutdowns will follow the normal holiday breaks.
GM spokesman Dan Flores said the cutbacks are a market-driven decision to
bring production in line with "market forecasts and current demand," and he
noted the automaker is also increasing manufacturing at some plants. On
Wednesday, GM announced it is investing about $250 million in its Shreveport,
La., truck assembly plant to produce the Hummer H3 SUV.
However, it's clear that demand for some of GM's most profitable pickups and
SUVs is waning because they are at the end of their model lives. Rising gas
prices may also be discouraging some consumers from buying bigger vehicles.
GM management has already told hourly workers about changes at the following
plants:
• Pontiac Assembly, which builds the Chevrolet Silverado and GMC Sierra
pickups. In January, GM will eliminate a third shift at the plant, which employs
5,200 hourly workers, causing the layoff of about 900 employees.
• Arlington Assembly in Arlington, Texas, which builds the Cadillac Escalade,
Chevrolet Suburban, Chevrolet Tahoe, GMC Yukon and GMC Yukon XL. The plant,
which employs 2,634 hourly workers, will have extended downtime during the weeks
of Jan. 3, Jan. 10 and March 14.
• Janesville Assembly in Janesville, Wis., which builds the Chevrolet Tahoe,
Chevrolet Suburban, GMC Yukon and GMC Yukon XL. The plant, which employs 3,180
hourly workers, will have extended downtime the weeks of Jan. 3, March 21, March
28 and April 4.
• Lansing Craft Centre, which builds the Chevrolet SSR pickup. The plant,
which employs about 300 hourly workers, will have extended downtime the week of
Jan. 3.
• Lansing Car Assembly, which builds the Pontiac Grand Am and Chevrolet
Classic, the previous version of the Malibu. The plant, which employs about
2,170 hourly workers, will have extended downtime the week of Jan. 3.
• Oklahoma City Assembly, which builds the GMC Envoy XL, GMC Envoy XUV and
Chevrolet Trailblazer EXT. The plant, which employs 2,427 workers, will have
extended downtime the weeks of Jan. 3 and Jan. 10.
On Jan. 17, the plant will reopen with a slower line speed, a move that is
expected to result in longer-term job reductions. Flores said the size of any
potential layoff in Oklahoma City is not yet clear.
"We're still working those issues out," Flores said. "There will be some
impact."
Nevertheless, management told employees that the line speed in Oklahoma City
will be reduced by 24 percent -- from about 42 vehicles per hour to 32 -- and
that 567 workers would be laid off, according to one assembly worker who did not
want to be identified.
<H3>Seniority counts</H3>
Based on the UAW contract, employees must be selected for layoff according to
seniority, so that workers with the least amount of time with the company would
be the first laid off.
Under the UAW contract, workers who are temporarily laid off should get 95
percent of their usual take-home pay once unemployment and supplemental pay are
combined. That amount is then taxed, which means workers would actually bring
home 65-70 percent of normal pay. Some of those workers could also be moved into
a so-called jobs bank, where they get full pay until they find a new job.
GM's latest production cuts come on top of production declines GM is already
making in the final months of this year.
In September, GM said it would build 95,000 fewer cars and trucks in the last
three months of 2004 than it did in the last quarter of 2003, when it built 1.39
million vehicles. Earlier this month, GM revised that projection downward by
10,000 more vehicles, saying it would build a total of 1.28 million cars and
trucks this quarter.
But that 8-percent cutback in the final quarter apparently won't trim
inventory levels enough to meet the automaker's internal projections of current
and future demand for its products, which seems to be shrinking.
David Healy, an auto analyst with Burnham Securities, said GM will probably
end the year with excess inventory, despite its production cuts and aggressive
incentives, which now top $4,300 per vehicle, according to Autodata Corp. of
Woodcliff Lake, N.J. He expects GM to end 2004 with 1.2 million vehicles on
hand, probably 100,000 more than the automaker wants.
"They, frankly, built too many cars in the first half of 2004, and I don't
think the inventory reduction process will be finished" by the end of the year,
Healy said. Despite the production cuts, Healy expects GM will continue to
enhance its incentive programs for the remaining months of the year.
Michael Robinet, vice president of global forecasting services for CSM
Worldwide, a Farmington Hills-based auto-research firm, said GM needed to reduce
production because while pickups and SUVs remain popular, their sales aren't
growing as fast as they once were.
Truck sales, which ballooned over the past two decades and now represent
about 55 percent of the new-vehicle market, are stabilizing as cars disguised as
SUVs become more popular, Robinet said. Those so-called crossover vehicles
include products like the recently released Ford Freestyle.
What's more, there are more competitors in the truck segment, causing
companies that have traditionally dominated the pickup, SUV and minivan
categories to lose sales.
"I think what you're going to find is that Big Three manufacturers are
experiencing some issues with sport utilities," Robinet said. A lot of the truck
growth, he added, "has essentially dwindled off."
Overall, consumer demand for cars and trucks has been growing this year. The
market for cars and light trucks has increased by a combined 1.3 percent this
year, with 12.8 million vehicles sold through September. But GM's share of that
market has dropped one-tenth of a percentage point this year, to 27.9 percent.
Some analysts are predicting a slowdown in auto sales this month after
consumer confidence numbers declined in September and October.
</P>
Contact <SPAN class=b>SARAH A. WEBSTER</SPAN> at 313-222-5394 or
swebster@freepress.com.</P>
<P align=center> Copyright © 2004 Detroit Free Press
Inc.</P></BODY></HTML>
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