Gas prices and bad loans cost GM truck plant jobs

As gasoline prices across the United States continue to hover at $3 a gallon and up over the Labor Day weekend and the toll of bad mortgages continues to climb, the effects will be felt in Oshawa, Ontario.

High gas prices tend to hit casual, non-commercial pickup truck buyers who buy one because they might need to haul some top-soil or mulch a few times a year. The more troubling aspect for General Motors (and Ford and Chrysler) is the mortgage problem. A large chunk of the full-size pickup market is consumed by commercial buyers, many of whom are in the construction industry. With the implosion of the sub-prime mortgage market, new construction starts are slowing to a crawl and builders are ordering fewer trucks. As a result GM has announced that they will cut the third shift at the Oshawa truck plant and lay off 1,100 employees there. Oshawa was the last of five truck plants still running three shifts and had already cut overtime. Next spring, the Oshawa plant will start building pickups equipped with the Two-Mode hybrid system that's coming this fall on the Tahoe/Yukon SUVs.

[Source: Automotive News - Sub. req'd]

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