GM idling 2 car plants as demand declines
General Motors Co. will cut production at two of its car plants in an effort to reduce dealer inventories.
The Detroit-based automaker this week scheduled production shutdowns for March 9-13 at the Orion Assembly plant in Metro Detroit as well as April 13-17 for its flex line at Oshawa Assembly in Ontario, according to people familiar with the situations.
Workers at Orion Assembly build the small Buick Verano sedan and subcompact Chevrolet Sonic. Both had double-digit sales declines last month compared to January 2014, including the Sonic dropping 46.5 percent.
The downtime comes a month after GM scheduled shutdowns for the weeks of Feb. 16 and April 6. In November, GM also said it would lay off 160 employees at Orion Assembly through the end of 2015. The plant has about 1,750 hourly workers.
“The drop in small and midsize car demand isn’t surprising given the market’s shift toward trucks and SUVs over the past 12 months,” said Kelley Blue Book senior analyst Karl Brauer. “Many of the vehicles GM is cutting production on are older models due for replacement soon, further reducing consumer interest.”
Ron Svajlenko, president of Unifor Local 222, which represents Oshawa Assembly, said GM has alerted the union that more shutdown weeks could be coming.
Oshawa’s flex line builds the Chevrolet Camaro and Camaro Convertible, Buick Regal, Cadillac XTS and Chevrolet Impala. About 2,700 employees work on three shifts for the flex line.
Brauer said GM adjusting production to meet demand isn’t necessarily a bad thing, calling it a “proactive effort to reduce inventory versus cutting pricing on overstocked models.”
“It’s the smart move because it preserves residual values and brand equity,” he said.