More Job Cuts and a Plant Closure Announced by GM

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Even as General Motors Corporation (OTC:GMGMQ) (GM) (Detroit, Michigan) just begins to fully wrap its hands around its recent bankruptcy filing, the automotive giant has already announced cuts that will eliminate jobs and close a longstanding assembly plant. GM announced earlier this week that it would cut an additional 4,000 salaried jobs by the end of 2009. In addition, GM will be closing its Shreveport, Louisiana, truck assembly plant by June of 2012.

GM currently has more than 27,000 salaried, white collar workers and has committed to reducing that number to 23,000 by year's end. The employees will be offered the standard severance package, while employees near retirement age will have an opportunity to take early retirement instead. The U.S. Treasury department, which has assembled an auto taskforce to oversee GM's bankruptcy and restructuring, has already approved the salaried cuts. GM had already reduced its salaried workforce by some 2,000 employees earlier this year as part of its failed effort to stave off a bankruptcy filing. The standard severance package will include two weeks pay for every year of service with a maximum of six months of pay. Many of these cuts will be involuntary and will be determined by employees' performance, skill set and length of service with the automaker.

The Shreveport assembly plant is currently producing the Chevrolet Colorado, the GMC Canyon, the Hummer H3 and the Hummer H3T. Along with the assembly plant, the stamping plant will close at the same time. GM will, however, continue to produce the two Hummer models on a contractual basis, although the Hummer brand is reportedly being sold to a Chinese company. The assembly plant's closure will coincide with the end of both the Colorado and Canyon models. More than 1,400 hourly workers will lose their jobs as a result of these closures.

The job losses will essentially be a wash for the automaker, however, as GM has also announced that it will keep the Orion Township plant in Michigan and the Pontiac stamping plant open to produce a new small car in the future. The Orion plant had been competing with the Janesville plant in Wisconsin and the Spring Hill, Tennessee, plant for the honor of remaining open to make this new, as yet unnamed, small vehicle. Some 1,400 jobs will be preserved in Michigan as a result of this move. The Orion plant will be retooled and is expected to have a capacity of 160,000 vehicles per year. The retooling will begin in late 2010, with production beginning in 2011.

The road through bankruptcy will be difficult for GM. While many are hoping that the company can emerge as rapidly as Chrysler Group LLC (Auburn Hills, Michigan) managed, the likelihood of this happening is slim. GM is a much larger entity than Chrysler and will face many problems that were not issues for Chrysler. While GM is selling off several of its unwanted brands and is discontinuing the Pontiac brand altogether, there is some doubt that this will be enough of a reduction in brands and models to allow GM to become a leaner, fitter entity. GM has already announced that it will close 14 plants in the coming months, but the real question is: will that be enough?

View Plant Profile - 1508029 1518686 1504415 1004089 1068845

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.