Autoblog

Less than 2 months ago the headline here was GM ramps up Cobalt production to meet demand. It's amazing how quickly things change in this crazy environment. Just months after adding a third shift at the Lordstown, OH assembly plant where the Chevy Cobalt and Pontiac G5 are built, on Friday GM gave 1,100 employees at the facility layoff notices. The company isn't getting rid of the third shift but, it is slowing the build rate in line with current sales demand. Earlier this summer, GM was selling Cobalts as fast as they could build them and now all of a sudden, those sales have dried up. The spike was triggered by $4 gasoline, and even though gas prices have dropped to half that level, you might not expect sales to fall so fast. The real problem is the lack of available credit for financing. Most of the inherent customer base for cars like the Cobalt simply can't afford to pay cash for a new car. With credit increasingly hard to get, car sales have crashed almost across the board in October. Even the Honda Civic that sold 53,000 copies in May got just under 19,800 in October. Expect to hear more about slowdowns at other carmakers, including mighty Toyota and Honda, very soon.

[Source: Vindy.com]

"These are truly unimaginable times for our industry." That's how Chrysler CEO, Bob Nardelli, starts off a recent email to employees, just before dropping the bomb that the automaker intends to cut 25% of its salaried workforce beginning next month and continuing through the end of the year.

According to reports, Chrysler currently has 17,332 salaried workers, so 4,333 workers will be offered "voluntary" retirements and buyouts, while those who don't accept the automaker's offer, which includes "enhanced benefits" of cash and new vehicle vouchers, will be laid off. This is in addition to the 1,000 white-collar jobs Chrysler cut at the end of September.

Chrysler also plans to cut back on "all discretionary and overhead expenses and reduce capital expenditures not connected to major product programs." Nardelli admits that the company can't continue as it has in the past and that these tactics are an attempt to right-size the company to "reflect declines in volume." While we understand the trials and tribulations faced by Chrysler, Nardelli's email has a "this is going to hurt me more than you" ring to it. Judge for yourself after the jump.

Chrysler has been struggling with sales declines more than most automakers during this challenging economic environment, and the some of that pain will transfer to its salaried workforce. The Pentastar is laying off 300 workers today and Friday due to the automaker's inability to reach its goal of 1,000 salary job reductions through retirements. All employees have been ordered to show up for work tomorrow regardless of any vacations or if they are scheduled to work or not.

Chrysler CEO Bob Nardelli told dealers yesterday that the Pentastar has lost $400 million so far in 2008, which is likely very bad news for Cerberus investors. There are very few feelings that are worse than losing a bunch of money, but we think going into work tomorrow with a real chance of being handed a box and being told to pack your things would be worse.

[Source: Automotive News subs req'd]

As reported recently, even though Toyota halted Tundra production for a while, the company pledged not to lay off its workers. At a total cost of potentially $1 billion to the company, Toyota instead placed the employees in retraining and civic works programs during a Kaizen and Development Period.

What kinds of civic programs? One of them, in San Antonio, is called the City-Toyota Green Clean-Up Project, which has put up to 340 workers on the streets to "clean, paint, and plant." Factory staffers have painted curbs, picnic tables and trash cans, trimmed trees and plants, and cleaned up lots. While employees do want to get back to the factories, they're enjoying the time away and being able to give back to the city -- all the while earning their regular wages and benefits.

A second round of city improvement will begin next month. After that, Toyota expects to have all hands on deck again at the factory in November, building 2009-model-year Tundras. Thanks for the tip, Mike!

[Source: My SA News]

Toyota is struggling to sell trucks and SUVs like everyone else, but unlike the competition, no full-time workers from stalled factories are getting laid off. The 4,500 workers at idled plants are instead bettering themselves through eduction by taking classes on safety, diversity, and Toyota history. They're also doing community service while on the clock and even some gardening. The workers will be learning how to work faster and smarter during the down time, and are even being shifted to busier plants on a temporary basis to help plants that are working beyond capacity to keep up with demand.

Toyota's plan to keep its workers busy at all costs isn't cheap, as about $50 million is being spent to keep workers busy with training programs. Of course, you can't please everyone and the plan isn't sitting well with all of Toyota's workforce, as workers at running factories don't like the fact that laid off workers are getting a leg up on training. A more skilled plant could have an advantage over others in getting earmarked for future products, so unaffected workers also want the extra training.

While expensive and a bit of a logistics nightmare, Toyota's plan is a good one if you can afford it. It should help create a more loyal, better trained workforce that also forges ties with the surrounding community. We bet Toyota hopes it will prevent any talk of unionizing, as well. And with Toyota's record profits over the past few years, $50 million is a drop in the corporate bucket.

[Source: Automotive News - Sub. Req., Image: Junko Kimura/Getty]

For white collar workers that still work at the Ford Motor Company: congratulations, you've officially made the cut. Ford's President of the Americas, Mark Fields, announced at a media event that the Blue Oval has successfully achieved its targeted cuts, at least for now. Fields told reporters that Ford would "continue to look at our structure and evaluate that versus the external environment," which is fancy executive talk for "if we don't start making some money, we'll cut some more." Fields didn't reveal the exact number of cuts that were made to achieve that goal.

Ford announced in June that it would cut 15% of its salary-related costs in an effort to become more lean and conserve cash during the brutal automotive downturn. Ford is trying to conserve enough Bennies to pay for its ambitious powertrain plans that will be needed to help the Dearborn, MI automaker offer the fuel efficient vehicles customers want. Fields said that spending on engines and transmissions over the next couple years will be "unprecedented," and that Ecoboost, diesels, hybrids, and other fuel-saving technologies will get the lion's share of the spending. Ford also plans to convert three truck and SUV factories to small car production and add six European models to its product mix.

[Source: Reuters]

General Motors is looking to reduce its salaried (read: non-unionized) workforce by 5,000 employees by the end of the year, leaving the beleaguered automaker with 27,000 white-collar jobs in total. This 15% head-count reduction is part of an ongoing effort to trim costs as the automaker continues to hemorrhage cash.

Also on the docket are early retirement plans offered to a select group of workers close to retirement age, while employees who choose to stay won't be getting raises until 2010 at the earliest. If GM reaches its reduction goals, the automaker will have shed its salaried workforce by 17,000 people in the last decade alone.

[Source: The Detroit News]

FOLLOW UP: Tony Cervone, a GM spokesperson, has told Bloomberg that HUMMER is the only brand the General is considering selling or closing.

The Wall Street Journal is reporting that General Motors is looking to cut thousands of white-collar jobs and sell, or stop production, of some if its brands. The General has supposedly set 2010 as a target for its return to profitability, but the automaker has never announced any details on how it plans to achieve that goal.

GM's management team will be meeting with the board early next month to discuss raising additional cash, and that could mean seriously pruning GM's bloated brand portfolio. HUMMER is supposedly already on the block, but Chevrolet and Cadillac – brands at the core of GM's business – are likely safe from the ax. However, Buick, Pontiac, Saab and Saturn, which haven't fared well during the biggest U.S. sales slump in 15 years, could possibly be sold or killed completely.

While it deserves note that all of this information comes from unnamed WSJ sources, GM's recent stock plunge and abysmal June sales numbers means something has to be done, and quick. If that entails cutting underperforming brands, so be it -- nostalgia be damned.

[Source: WSJ (Sub. Req.) via Reuters]

Click above for a high-res gallery of the Toyota Tundra

The full-size pickup truck woes continue to worsen, leaving even mighty Toyota little choice but to slow production of its Tundra model. In fact, Toyota's brand new plant in San Antonio that was built just for the Tundra will be shutting down a total of 14 days between now and October. Full-time workers at the plant will be able to use vacation days, take the time off unpaid or find something else at the plant to do while the assembly line is halted.

Unfortunately, temp-to-hire workers aren't so lucky. Two-hundred employees who were hoping to land full-time positions at the plant will be laid off this summer. Toyota spokesman Mike Goss says, "We have a very long-term view of that factory in Texas. We're trying not to overreact. We're trying not to shut it down." Whoa... back up. Shut it down? We hadn't heard any such thing until it was spoken by Goss. Sounds like things are just as bad for Toyotas with beds as they are for pickups from Detroit. Thanks for the tip, Mike!


[Source: AP via My San Antonio]

Blame the plunging greenback. Less than a week after BMW announced the expansion of their U.S. Spartanburg plant, we are getting news from Germany that the weak dollar is making it increasingly difficult for the German automaker to keep production on their soil and that layoffs are imminent. Ernst Baumann, BMW's head of personnel, said 5,600 jobs in Germany will be cut by the end of the year. When you add that to the 2,500 positions already eliminated, the total represents about 7.6-percent of BMW's workforce.

While the layoffs are bad news for German factory workers, the flip side of the coin may benefit their American counterparts. With the value of the Euro sitting at more than $1.50 at current exchange rates, European automakers are finding manufacturing on U.S. soil more attractive (read that "cost effective") than ever. BMW manufactured about 155,000 vehicle on U.S. soil last year. By 2012, that number is planned to approach 240,000 cars. BMW sales worldwide reached 198,628 in January and February, up from 191,357 the same period last year. With the new BMW 1 Series and BMW X6 models hitting showrooms in 2008, BMW is forecasting yet another year of increased sales.

[Source: Detroit News]