REPORT: GM planning up to nine-week summer shutdowns
This is what bringing a behemoth back down to the proper size looks like. General Motors is looking for every way to conserve its ever thinning supply of money, and while April sales were better, the overall picture is decidedly grim.
In a move to conserve resources and hopefully help clear up any inventory buildups, AFP is reporting that The General plans to idle most of its domestic plants this summer – for as long as nine weeks. GM is expected to let its employees know first before any official statements are made, but it is believed that the work stoppage will coincide with GM's normal July shutdown, though there could be staggered closures as early as May.
If GM does put its operations into a large-scale hover, it may have a ripple effect on suppliers, many of whom are also holding on by the slimmest of margins. Will the summer be a season of cascading furloughs and bankruptcy announcements? Let's all take a deep breath as we wait to see.
[Source: AFP]
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Reader Comments (Page 1 of 2)
Jake 9:17AM (4/23/2009)
It's only April 23 where I live. How do they know how April sales will end up?
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Jared 10:38AM (4/23/2009)
Looking at the sales data from the first 20 days of April, I'm sure that GM will be able to forecast reasonably well the sales from the remaining 11 days.
C.W. 10:44AM (4/23/2009)
sales trends for the last week of the month is actually pretty easy to do. they have TONS of data from various sources including trends from the current month, Polk vehicle registration data, consumer confidence, availability of credit, etc. They can predict how the month will end up within a percentage point or so. Especially if the best incentive programs are already in the market place.
TORONTO 9:17AM (4/23/2009)
Geeez.....
All the best to the families to whom this effects.... both GM & suppliers.
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Gstill 9:29AM (4/23/2009)
I'm pretty sure the UAW workers are still getting paid pretty close to the same wages they would be if they were actually working.
Not bad in this economy.
Yikes 10:49AM (4/23/2009)
Yeah, one of the nice UAW perks that are killing the Detroit brands are they must pay these workers even when the factories are idled.
Jei 11:09AM (4/23/2009)
I do wish the best for these folks too. I have 2 grandmothers that depend on Chrysler, Ford, & GM pensions.
On the flipside....I would actually want GM to temporarily shut down as many plants in the US as possible for those 9 weeks....at the same time. This would make a bold statement to the naysayers & to the govt officials that don't think many cities would miss GM if they were to be completely shut down.
9 weeks is 2 full months of these plants being idled. And then, the communities will feel it too as their daily customer base will drop dramatically also. And the associated suppliers would either use the time to either catch up or be forced to idle their workers too.
SimbaDogg 11:27AM (4/23/2009)
yeah, really...all the best
but i frankly think this is a good thing, you're out of work for 9 weeks, and i'm sure GM will give some time of partial pay to these guys. but it'd be much better to shut down for 2 months so you're not producing cars that dont have a market to be sold in. the more than GM brings its costs in line, the better the future viability of the company would be...which in the long runs increases your changes of staying on the job. at least i think
Judy Zik 11:27AM (4/23/2009)
+1 Toronto
People need to look past the hate we all feel for the CAW/UAW Leadership and remember there are real people with families behind the scenes who don't have a choice. When they are hired they are forced into the Union and the Union lives off their wages and bosses them around. If you dare speak out against the Union you will find yourself out of a job.
I feel sorry for the actual workers. Only an idiot would be jealous of a GM worker these days. GM will idle as many plants as it possibly can before filing for bankruptcy. The plants that get idled first will be the ones most likely to never reopen and they will all spend the summer wondering if the paycheque they just got might be their last.
If they are still working for GM there is a good chance it is because they can't find another job. Even the ones who took a buyout or early retirement may find themselves high and dry once GM goes bankrupt. Who do you think is going to get paid first the government, the banks or the retired workers? What do you think the future looks like for the benefits plan they are counting on?
GM's bankruptcy will ruin the lives of a lot of hard working folks who just wanted a good paying job. All the idiots who get on here and bash how easy life is for the workers have never seen the inside of an auto plant. First year turn over in factories is ridiculous because of all the loud mouths that fall in love with the pay but can't handle doing the job day in and day out.
Big Rocket 11:03PM (4/23/2009)
@Judy Zik (and others): It is too late for the UAW / CAW members to pretend to be the victims here. Did any of them really think they could charge substantially more for labor costs (wages + benefits) than transplant workers for the Japanese Big 3, and still expect the American Big 3 to remain competitive, retain market share, and keep going forever? Blame incompetent upper management if anyone wants to, but don't pretend overpriced union labor was blameless. They sealed their own fate with their collective bargaining for high wages and expensive benefits.
And that thing about all those hardworking union members you mentioned: What hard work would that be? I have been to several GM plants and one Ford plant, and in almost every case I looked at, the union workers had the luxury of push-button machinery to do the hard work for them, in the comfort of air-conditioned facilities.
Hydraulic lifts in use: http://www.autoblog.com/2007/03/01/do-you-think-that-the-chrysler-employeess-buyout-offer-was-fair/
Pneumatic power tools in use: http://www.autoblog.com/2007/05/15/jeep-employees-pissed-about-chrysler-sale-use-photo-71730996-f/
oldsfan 10:00PM (4/24/2009)
@BigRocket Didn't I see that Toyota and Honda are closing plants and buying out/laying off workers?
Maybe there's more to this than you want to admit!
Tagg 9:20AM (4/23/2009)
GM could probably be shut down longer because they such a huge supply of cars backed up. I read GM has a two year supply of G3's and it's not alone. The Lake Orion plant in Michigan which builds the Malibu and G6 has been down since early December and there are still too many Malibus. It's hard to imagine what the rest of their supply looks like if they can't get rid of the supply of what is by far their best mass-market vehicle.
I think some plants will be down longer than 9 weeks, maybe most.
Remember, the line workers will still be getting paid. Some will be getting as much as 90% of their wages because GM and the UAW never reached a deal like Ford did. Others that hired in after the last contract will umemployment.
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EU_reader 12:24PM (4/23/2009)
Think of all the discounted Malibus with 0 miles on the clock that will be offered in the upcoming year. They need to liquidate that stock somehow. No one will buy 2008-2009 Malibus in 2010-2011 for new prices
UCJR 9:37AM (4/23/2009)
They're going to be getting paid (albiet not 100% pay... more like 70 to 90%), so it's not like they're getting left high and dry by the company.
A 9-week vacation, with 70% pay? I'd take that in a heartbeat.
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Jeff Johnson 9:49AM (4/23/2009)
Here is a wild idea... if they want to save money while shut down...
Don't pay anyone! I'm only 27 years old, but I was raised that if I don't work, I don't get paid. Yeah sure they are "only" getting maybe 70% of their full pay, but they are sitting at home doing nothing.
It might hurt, but it seems like in this dire situation, it needs to chop off its left foot (the union) so it can actually make progress towards saving money. How does idling a plant for 2+ months and still paying everyone save tons of money?
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david 10:07AM (4/23/2009)
No machines running, turn off most of the lights, etc. You'd save a lot too if you turned off all your appliances and lights in your house for a month!
That being said, if I wouldn't be sitting at home, I'd be looking for a new job...
if i could find one.
Jei 11:15AM (4/23/2009)
Exactly, I'd be job searching like crazy. My interviews would be lined up for the 1st month.
I feel bad for those that live in or moved to a relatively small community were GM's plant is the ONLY descent place to work.
why not the LS2LS7? 12:28PM (4/23/2009)
They don't pay workers during the shutdown. That's pretty much the whole point. The hourly workers don't get paid because they are not clocking in/out, some of the salaried workers get paid, most do not. Workers are encouraged to take vacation time during the shutdown so they get paid as vacation time at least. However, many workers prefer to go on unemployment instead, which GM doesn't like because it costs them money.
SkiD666 10:10AM (4/23/2009)
I hope everyone realizes that ALL of the large car manufacturers will probably have to do something similar (some more than others of course).
Other than Hyundai (fleet sales) and a few smaller manufacturers, sales are down to basically 2/3 of previous years. That means that without slowing down production, everyone would have to stop production for at least 17 weeks.
I would guess everyone will have to shut down production of most plants an average of 4 - 6 weeks this year.
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C.W. 10:52AM (4/23/2009)
actually this isnt true. most of the major OEMs do a little thing called 'production planning' which takes into account inventory levels, sales trends, line rate at the plants etc...
the smart companies positioned themselves in a way that they have been lowering the line rates over the previous year, and realigning production with where it needs to be to support actual demand (crazy concept...i know). GM has more 'days supply' of anyone... to the tune of several vehicles actually have almost 2 years of supply already on the ground! Summer shutdown happens regardless of how well or poorly sales are (usually 2-3 weeks for all plants to retool, maintenence, updates, etc.). So no, everyone will not be doing what GM is doing. Ford for example has the typical 2-week summer vacation for it's plants (staggered) with some plants being down for 3 weeks. What GM is doing is purely reactionary to the simple fact they have 2 years of cars on the ground and no one buying them. in the production planning world, this could have been avoided by trimming production months and months ago, rather than freaking everyone out by shutting down for 2 months. it is insane.