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GM Plans Temporary Closings At 20 Factories

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The Associated Press

Published: December 13, 2008

Updated:

NEW YORK - General Motors Corp. said Friday that it will temporarily close 20 factories across North America and make sweeping cuts to its vehicle production as it tries to adjust to dramatically weaker automobile demand.

GM said it will cut 250,000 vehicles from its production schedule for the first quarter of 2009, which includes a cut of 60,000 vehicles announced last week. Normal production would be around 750,000 cars and trucks for the quarter, spokesman Tony Sapienza said.

Many plants will shut down for the month of January, he said, and all told, the factories will be closed for 30 percent of the quarter.

"We're adjusting pretty dramatically," spokesman Chris Lee said.

The move affects most of GM's plants in the United States, Canada and Mexico. During the shutdowns, employees will be temporarily laid off and can apply to receive a portion of their normal pay from the company. They can also apply for state unemployment benefits, Lee said.

GM and nearly all automakers who sell in the United States are mired in the worst sales slump in 26 years. GM reported its U.S. sales plunged 41 percent in November and are down 22 percent for the first 11 months of the year compared with the same period last year.

Cash-strapped GM is seeking government loans to stay in operation beyond the end of the year.

Auto demand in the United States, and increasingly around the world, has been hobbled due to the declining economy and the credit squeeze, which has made it more difficult and more costly for some buyers to obtain financing. Industrywide vehicle sales crumbled 37 percent in November.

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