GM to temporarily shut 13 plants, cut production

DETROIT — General Motors Corp. said Thursday it will temporarily close 13 assembly plants in the U.S. and Mexico — some for more than two months — laying off more than 26,000 workers to pare back a bloated inventory.

The closures, which will start in May, vary by factory from as short as three weeks to a long as 11, including the normal two-week July shutdown to change from one model year to the next.

GM said the shutdowns will help control high dealer inventories and bring manufacturing in line with sales. The company plans to cut production by 190,000 vehicles and reduce inventory from the current 767,000 to 525,000 by the end of July.

More than 26,000 hourly and salaried employees will be laid off at the affected assembly plants, but there will be thousands more layoffs and temporary factory closures when GM works out its schedules for engine, transmission and parts stamping factories.

If General Motors takes a break during the summer and closes down operations temporarily, Utah's Autoliv operations would likely see a decrease in orders, according to Autoliv spokeswoman Kathy Whitehead. But the company has no plans to lay off any of its 2,900 Utah workers.

"We do everything we can to avoid layoffs," Whitehead said.

Furloughs as a "way to lessen impact" are, however, likely as a key part of the company's strategy to cope with any decreased demand for its products, which includes safety airbags for automobiles, she said.

GM has 22 assembly plants in North America as well as dozens of other parts and powertrain factories.

Laid-off hourly workers will get unemployment benefits and supplemental pay from the company that amounts to most of their base wages. Salaried workers also will get some income, GM North America President Troy Clarke said.

In a conference call with reporters, Clarke said the shutdowns are not a sign that GM is headed into bankruptcy protection.

Clarke would not say exactly how many workers would be laid off, nor would he say if any of the factories would be closed for good. GM has told the government it plans to close five more factories as part of its restructuring plan, and its CEO said additional closures are possible.

He also said the company isn't making the cuts because it sees sales worsening beyond current projections.