• Dec 12th 2008 at 12:55PM
  • 51
General Motors has just announced it will cut vehicle production in the first quarter of 2009 by 250,000 units. The slowdown in production will reportedly affect some 21 factories in the U.S., Canada and Mexico, which may see their traditional shut-down period over the holidays extended through the end of January, and in some cases into February. This means that most GM factories in North America will sit idle for nearly a third of Q1 2009. GM has not specified which plants will be affected and how, but some workers were already notified this morning of the extended shut down period. We expect a press release from the General later today with more specifics, so stay tuned.

UPDATE: Follow the jump for official press release from GM detailing exactly which plants in the U.S., Canada and Mexico will be affected.

[Source: The Detroit Free Press, Photo by Bill Pugliano/Getty]


GM Announces Significant Production Cuts For Q1 '09

Moves In Direct Response to Rapidly Deteriorating Market Conditions

DETROIT - General Motors announced today a significant reduction of planned production for the first quarter of 2009 due to the ongoing and severe drop in industry sales, which were down 36 percent in November overall and 41 percent for GM (2007 vs. 2008). The impact of these and recently announced actions to adjust production with market demand, will result in the temporary idling of approximately 30 percent of GM's North American assembly plant volume during the first quarter of 2009 and will remove approximately 250,000 units from production.

The speed and severity of the U.S. auto market's decline has been unprecedented in recent weeks as consumers reel from the collapse of the financial markets and the resulting lack of credit for vehicle financing.

The following U.S., Canada and Mexico operations impacted by today's announcement include:



  • Oshawa Consolidated - Chevy Impala
  • Oshawa Truck - Chevy Silverado, GMC Sierra Light Duty Extended and Crew Cab
  • CAMI - Chevy Equinox, Pontiac Torrent

  • Silao - Chevy Silverado, GMC Sierra Light Duty Crew Cab, Chevy Avalanche, Cadillac Escalade EXT
  • Ramos 2 - Chevy HHR, Saturn VUE, Chevy Captiva
  • San Luis Potosi - Chevy Aveo, Pontiac G3
As a result of these assembly plant actions, GM will also continue to assess its powertrain and stamping capacity needs and make adjustments as appropriate.

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    • 1 Second Ago
      • 6 Years Ago

      No one said it happens overnight...but INSTEAD OF pissing away billions into something that is already dead, take that money and retrain people to do something better with their lives and better for the future of this country.

      Would people be willing to spend this much money to bailout a failing healthcare, welfare, or social security system? Or would they rather retrain people and staff them in jobs that have a future?
        • 6 Years Ago
        It's amazing how this country could give hundreds of billons of dollars away to banks at the drop of a hat, but to support its domestic automakers with a mere 14 billion or so, they have to give them a really hard time.

        Just how patriotic is our country anyway? Where did all the pride go?
      • 6 Years Ago
      How is it,bashing a race,a nationality,a gender, sexual orientation, a religion,or just about any "group" of people is a hate crime or at least politically incorrect,but bashing hard working, family orientated,patriotic, union workers seems to be a sport?
        • 6 Years Ago
        • 6 Years Ago

        Because they have become the punching bags and scapegoats of the losers in these forums who think the unions are the problem.

        But it's not a problem for these same corporations to ship US jobs overseas right? How I wish some of these morons here have their jobs shipped overseas...just so they can taste the bitter medicine they are so willing to dish out.
        • 6 Years Ago
        In my field (2D artist) I have to be competitive with my pay or it DOES IN FACT get outsourced overseas. It's the world we live in now.
        • 6 Years Ago
        No one is bashing them because they are union workers. I am very pro union. However, bashing a poorly managed union, like bashing a poorly managed company is fair game.
      • 6 Years Ago
      The auto loans appear to be a dead issue. Now there is only one recourse for the auto manufacturers...curtail production until the new administration sets in. I feel that GM is not shutting down as much capacity as they should at this point. They should be cutting back 50% or more right now in order to conserve as much cash as possible.

      The reason being is that GMAC is on the brink of bankruptcy as well. They have been only able to meet one third of the requirements to become a bank and tap into TARP funding. By Monday, I rather suspect the inevitable will happen.

      As GM bailout falters, GMAC races its own deadline
      • 6 Years Ago
      GM is so pathetic it is funny. CEO stole millions a year, lived like a king, and acted like he is the smartest guy in the room (he is an MBA from Harvard after all).........all he had to do was spend some money on smaller, fuel efficient cars that would allow GM to be in the same position as Honda and Toyota are right now--TOUGH but SURVIVABLE.

      But no, GM chose to build SUVs and trucks and not diversify into smaller vehicles.

        • 6 Years Ago
        If we harvested our own natural resources, SUVs would have remained the safe, viable, profitable, desirable, and affordable vehicles that they were.

        Instead, Congress continues to demand that American's be forced to retrieve their resources from volatile, danagerous, back-stabbing second and third world countries creating a situation that is ripe for speculation and strangulation.

        Yep, far-east manufacturers were better at spotting and adapting to those market realities, but you ignore that fact that they were self inflicted.

        Self inflicted by the same people who are "fixing" it now.

        Good luck with that.
        • 6 Years Ago
        Sure, and people have been forced into buying SUV's
        • 6 Years Ago
        It's called advertising....people fall for it.

        So what side of the table are you on? Some people here say it's the people's fault because they DEMANDED SUVs....yet others say it's GM's fault because they built them knowing the huge profit margins.

        It's both. GM was greedy...people are stupid.
        • 6 Years Ago
        They actually have quite a few fuel efficient vehicles under production that are either top in class or competitive.

        The other companies didn't diversify so much as that's what they had to produce if they wanted to survive outside of america(IE their home markets).
        • 6 Years Ago
        The Cruze will not be built in Korea. Get you facts strait. Lordstown Ohio is getting the Cruze.

        It is wishful thinking that the US consumer is demanding small cars. It is simply a fact that SUV and larger cars are still the big seller and that is what GM is selling. The problem they are in has nothing to do with GM's car lineup.
        • 6 Years Ago
        I'd like to comment on the HUGE MARGINS everyone attaches to the SUVs.

        First, I'd like to bring up the uselessness of CAFE. Most of us here on Autoblog get that a fuel tax would be more effective for curbing fuel demand than the CAFE rules that actually encourage fuel consumption.

        In conjunction with that, I'd like to introduce the concept of supply and demand.I spoke about it in reference to fuel a moment ago.

        CAFE requirements basically made trucks and SUVs more attractive by making them get better mileage. So instead of purchasing smaller, more fuel efficient vehicles, the government made trucks and SUVs more attractive.

        At the same time, the goverment took the previous corporate average fuel economy and increased it (assumed improvement across the board at the current car / truck mix).

        But fuel price wasn't the issue at the time - it was aggregate demand. And in mandating improvement in the individual fuel economy of vehicles, the government took no action that would move the individual consumer to spend less on gas.

        In fact, what they did was allow the consumer to hold spending constant and trade up.

        In trading up en masse, the portfolio mix changed. And since no foreign automakers had trucks or SUVs to trade up to, this mix shift really only affected the Big 3.

        The fleets of each of the Big 3, which before had been in line with the new CAFE targets (since they were concocted to be an improvement on the previous fleet average), were now well below what they needed to meet the new CAFE requirement.

        Now, say what you will about the Big 3, but they ARE smarter than the government. So, instead of enforcing quotas on what they would build, they used pricing (think supply and demand here). They increased price to reduce the number of trucks and SUVs they sold, and decreased price to increase the volume on smaller cars. Then they used some of the extra profits from the trucks to subsidize the cars.

        It's no accident that the worst fuel economy vehicles have the highest margins. The auto companies have been using high prices to discourage consumption for years, and the worse the CAFE impact on the company's fleet, the higher the incentive to purchase something else.

        • 6 Years Ago
        Yes their cost structure was bad, but back in the 90's they were making money hand over fist compared to Toyota. Ford especially, made insane amounts of money with the Explorer.

        They could have invested that money into bringing really competitive cars onto the market-you make it sound like they were never capable of it, but this just isn't true. The original Taurus was a big seller. They just stopped putting development money into cars because SUVs were easier to make money on.

        The Big three made close to $15 billion a year during the mid-90's, money they could have used to restructure their labor contracts (buy people out) or just plow into R&D to keep their cars ahead of the competition. Or actually release cars like the GM Precept, Ford Prodigy or Chrysler ESX-3.

        Truth is, they obviously didn't think it would ever get to this point, so I'd say it's something of a combination of arrogance and stubborness that got them here. They basically saw the big profits from SUVs and trucks and pretended like they didn't have any problems with their cost structure or car quality.

        We all know they make great trucks-but it's because they plowed a LOT of money into those truck platforms!
        • 6 Years Ago
        @ Jaime, i understand what you are saying, you saying that GM gave it a try.

        But Wagoner gets paid 17+ mill a year, you do not get that type of money for "trying something", you are supposed to DELIVER RESULTS.

        If not small cars something else, you can not take a company to where it is now, which is DEAD.
        • 6 Years Ago
        sk i did not say GM forced people to buy SUVs, GM was dumb enough to become so dependent on SUVs and not hedge their bets by building a GREAT small car that would allow them to have a little diversification.

        Do you realize that GMs answer to Civic is a Cobalt and in 2+ years it will be a Korean build Cruze....it will be build by Daewoo, same company that builds AVEO.
      • 6 Years Ago
      Do they get paid for sitting around @ home?
      • 6 Years Ago
      "[B]ashing hard working, family orientated,patriotic, union workers seems to be a sport?"

      So...pointing out the obvious is now a form of "bashing"? The UAW's intransigence on this is self-defeating in the end. Pay cuts may not be popular, but it's better to get 80% of something than 100% of nothing.
      • 6 Years Ago
      @ SeaUrchin

      GM cannot build an econobox and make any profit. Their cost structure is simply too high. That is what the argument is about. They concentrated on SUVs because gas was cheap and margins were profitable. They simply cannot compete with Nissan, Toyota, Subaru, Suzuki, Kia, Hyundai...because their total cost of labor is too high. It is not as though they don't want to make small efficient cars, they cannot afford to.

      Had you more than a neuronal ganglia you would be able to figure this out!
      • 6 Years Ago
      I think it's a good move. It should be the start of showing the Senate how retarded their decision was.

      Let's add some humor to this thread:
      • 6 Years Ago
      @ noz
      And all that happens overnight right..... poof... here's a job.... poof... here's some cash.
      I don't know man.... it's not the magical kingdom.
      There is going to be some very hard times for quite a lot of people.
      My hearts go out to the hard working people who are caught in the middle of all this. All the best to them.
      • 6 Years Ago
      Toyota is Lowering Wages and Benefits in the U.S.

      Toyota has just by-passed General Motors becoming the largest auto company in the world. For the first quarter of 2008, Toyota sold 2.41 million vehicles worldwide to GM’s 2.25 million. Also, for the first time, Toyota has passed Ford in sales as the second largest auto company in the U.S. (In May, Toyota pulled within 10,000 vehicles of overcoming GM in sales.)

      Toyota is now in a position to set, and lower, wages and benefits across the U.S. auto industry. In September 2007, the Wall Street Journal reported “...that Toyota Motor Company…now sets the bar for labor costs in the U.S. auto industry.” The industry paper, Automotive News (August 13, 2007) reached the same conclusion.... “Toyota is going to set the pattern for the entire industry---wages, benefits and pensions….”

      Currently, Toyota wages and benefits in the U.S. are 25 to 30 percent lower than those paid by the Big Three auto companies—General Motors, Ford, and Chrysler. U.S. auto companies pay anywhere from $63.65 to $70 per hour in wages and benefits to its workers while Toyota pays $47.50 to $50 an hour.

      Toyota held its wages and benefits down by setting up non-union plants in the South, far from auto industries’ stronghold in the upper Midwest. (Toyota has just one unionized plant in Fremont, California, which is a joint venture with G.M.) To keep the unions out, Toyota has been paying hourly wages which are roughly comparable with the Big Three, but with much lower benefits. Toyota pays around $25 per hour in comparison with G.M.’s $26 to $28.

      This is about to change. By April 2008, the Wall Street Journal was reporting that “Toyota Motor Company is now pushing to lower labor costs in the U.S., say people familiar with the matter….Toyota has stopped pegging its wages to UAW rates when it builds new plants, company executives said. It won't cut wages of current workers, but new hires will be paid no more than 50 percent above the prevailing manufacturing wage in the area where a plant is located, they said.”

      In fact, months earlier, in September 2007, an internal memo was leaked at Toyota’s giant Georgetown, Kentucky plant laying out management’s plans to cut $300 million in labor costs across Toyota’s North American operations over the next three years. Not only would new hires come in at lower wages—no longer comparable to U.S. union wages—but benefits would also be cut, including reduced health coverage. (New York Times, September 4, 2007)

      For example, if the prevailing manufacturing wage in Kentucky—including first-time supervisors—is $14.62 an hour, Toyota will pay, at most, just 50 percent above that, or $21.93 an hour, which is down $3.07, or 12 percent, from its current $25 an hour rate.

      With Toyota leading the way, the U.S. auto industry is now locked in a race to the bottom. Not to be outdone, Hyundai of South Korea recently opened an auto assembly plant in Montgomery, Alabama offering starting wages of just $14.00 an hour.


      You must read the complete report on Toyota and its plan for domination of the world markets. This will utterly shock you into realizing that there is more going on here than we are lead to believe. No wonder the southern senators were holding out. They're on the winning side if Toyota breaks the unions and the Detroit 3.
      • 6 Years Ago
      GM should work extremely hard to get Cruze out of the door.

      It should be better looking, better equipped, and should cost less than Civic to help the GM.

      • 6 Years Ago
      Excellent...that's 250.000 less pieces of sh8t on the road!

      Keep going GM...with any luck you'll be gone with the end of next year.
        • 6 Years Ago

        Get another job...get retrained...go work in another industry. Are you saying a skilled worker in the auto industry can't find a job in the green industry fixing, building, manufacturing?

        Are you all that closed minded?
        • 6 Years Ago
        No one said it was easy. Life is hard...and that's why Americans are having a hard time now...because they've been living a delusional dream and want everything given to them and handed to them.

        If you are inflexible, you will lose. It's pure and simple.

        And dupes like Frylock still are in denial. I'm a troll...yeah..I guess I said something you can't face up to huh Frylock...oh well.
        • 6 Years Ago
        he he... so funny... what about 500k people out of work ... he he... so funny.
        • 6 Years Ago
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