GM Takes Drastic Action, Announces Record Production Cutbacks

December 12, 2008
"Reeling from a 41 percent drop in its November U.S. sales," says Automotive News, and not quite sure where the money to stay afloat will come from after yesterday's rejection of the domestic auto bailout deal, GM will cut about 30 percent of its North American production capacity during the first quarter of 2009. That's a drop of about 250,000 vehicles compared to Q1 2008 according to The Detroit News, and a total Q1 production target less than that of rival Ford, a company that's historically been outsold by GM. Ford plans Q1 production of 430,000 vehicles.

In Michigan alone, six plants will be affected. Flint Assembly (Chevrolet Silverado, GMC Sierra), the Delta Township plant in Lansing (Lambda Crossovers), Pontiac Assembly (Chevrolet Silverado, GMC Sierra), Lansing Grand River (Cadillac STS, Cadillac CTS), Orion Township (Chevrolet Malibu, Pontiac G6), and Detroit-Hamtramck (Buick Lucerne, Cadillac DTS). Had car sales and the economy not tanked, GM would have been on target to produce about 750,000 vehicles during the first quarter of 2009. GM will also be temporarily shutting down at least 20 plants in the U.S., Mexico, and Canada.

The Detroit News sums up GM's massive struggle: a loss of nearly $73 billion since 2004; a 22 percent drop in U.S. sales for 2008; a lack of available credit, low consumer confidence, and the rising unemployment that's killing new car sales. All GM divisions have reported 20-plus percent sales declines for 2008, and industry demand for new vehicles has dropped about 16 percent. That's the lump of coal in the stockings of American auto workers, Big Three execs, and domestic dealers across the country this Christmas.

Said GM spokesman Chris Lee: "This is unprecedented...the market has tanked."--Colin Mathews

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