GM to cut 100 more jobs at Orion Assembly
General Motors Co. said Friday it is adjusting production and will lay off another 100 workers at its Orion Assembly Plant beginning next month, the latest move from the automaker as it deals with slower car sales.
The Detroit automaker builds the subcompact Chevrolet Sonic and small Buick Verano at the Orion Township plant. In November, GM said it would lay off 160 employees at Orion through the end of 2015. A spokesman confirmed the layoffs announced Friday are in addition to the layoffs announced in November.
Verano sales of 15,279 are down 15.6 percent through May this year, while Sonic sales of 29,082 are down 28.5 percent. Consumers have not bought as many small cars this year amid lower gas prices and preferences shifting to SUVs and trucks.
“GM Orion Assembly will adjust plant production capacity to align with the market demand,” plant spokesman Chris Bonelli said. “A phase layoff of approximately 100 employees will begin in July 2015 and conclude by year end.”
Employees learned of the layoffs in an internal message Friday. Bonelli declined to say what changes were being made to production. The automaker is taking the production cuts and slowing the line speed in part to keep its residual resale values up amid slower sales and so it doesn’t have to turn to hefty incentives to sell vehicles.
Earlier this year, GM idled production at Orion for a week each in February, March and April. It also cut one shift at its Lansing Grand River Assembly Plant earlier this year amid slow sales of the Cadillac ATS and CTS sedans but last month announced reinstatement of the second shift and bringing back 500 workers in late summer as it prepares to launch the next generation Chevrolet Camaro.
Previous downtime at Orion has helped GM to keep a healthier inventory level of cars as sales have slowed. Supply of the Verano at the beginning of May, for example, was 59 days, according to data provided from LMC Automotive.
The plant will take an additional week of downtime around the July 4th holiday, a time when automakers traditionally shut down plants. In total, Orion will be off for three weeks, including the week of June 29, July 6 and July 13.
About two-thirds of GM’s North American vehicle assembly plants will have a shutdown during the summer months, GM spokesman Bill Grotz said. Grotz said most plants used to shut down in early July for model year changeover but now downtime is scheduled by the specific vehicle lifecyle and market demand.
“This approach gives us more flexibility and enables quicker response to market conditions,” Grotz said in a statement. “Shutdown periods will vary by plant based on launch timing of new or refreshed models across the portfolio and our ongoing efforts to align production with market demand.”
Amid high demand for trucks and SUVs, some GM plants that build full-size and mid-size trucks as well as full-size SUVs are skipping the normal shutdown week. GM’s Fort Wayne Assembly Plant, Arlington Assembly Plant and Wentzville Assembly Plant are among factories that will be producing vehicles the week of June 29 except for July 3, which is a UAW holiday this year. The Bowling Green Assembly Plant, which builds the popular Chevrolet Corvette sports car, also will work through the holiday week.
Orion Assembly has about 1,580 hourly workers and 180 salaried workers. Workers at the facility will build the new Chevrolet Bolt EV, a vehicle expected to have at least 200 miles of all electric range and to cost about $30,000 after federal incentives. The Bolt EV is being tested now and could come into production in late 2016 and go on sale in early 2017, according to LMC Automotive. GM is investing $160 million into the plant for the Bolt EV but it has not officially said when it will be available.
The layoffs and production changes were first reported by Automotive News.