GM to cut production at Detroit car plant

By Auto FOXBusiness

New cars are shown for sale at a Chevrolet dealership in National City, California, U.S., June 30, 2017. (REUTERS/Mike Blake)

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General Motors (GM) said Thursday it will cut production at a Detroit-area plant in response to sluggish demand for passenger cars.

The nation’s largest automaker plans to temporarily shut down its Detroit-Hamtramck assembly plant from Nov. 20 through the Christmas break, according to a company spokesperson. Also, starting Oct. 20, GM will put the factory on a reduced production schedule, citing a decline in industry volumes. GM said the moves will keep supply and demand in balance.

About 1,500 employees will be out of work while the plant is closed for a five-week period. Fewer than 200 workers will be let go due to the overall production cut.

The Detroit-Hamtramck factory builds four slower-selling models: the Buick LaCrosse, Cadillac CT6, Chevrolet Impala and Chevrolet Volt. Earlier this year, GM laid off workers at the plant when it eliminated a late shift. The company also extended traditional summer plant shutdowns to further reduce production of certain models like Chevrolet’s Cruze and Malibu. Meanwhile, GM has moved some workers to busier plants that produce SUVs and pickup trucks.

Automakers are grappling with weak sales of sedans and other smaller vehicles, as consumers flock to SUVs and crossovers. With supply swelling, manufacturers have sought to curb production. The industry has also increased discounts on unpopular models in hopes of selling off excess inventory, a move that eats into profits.

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Ford (F) recently said it would cut production at three U.S. plants and two in Mexico, while CEO Jim Hackett indicated that some sedans could be dropped entirely. Fiat Chrysler (FCAU) stopped making the Chrysler 200 and Dodge Dart last year.

The changes at Detroit-Hamtramck were first reported by the Wall Street Journal, which said GM planned to cut the plant’s total production rate by about 20%.

GM shares fell 1% to $45.05 in recent trading.

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