Trucks likely target of GM revamping
Higher gas prices are driving product change. Also, 19,000 workers have signed up to leave.
DETROIT - General Motors Corp. will furlough entire shifts of workers at some truck factories and may move them to nearby car plants as it restructures to adjust to a rapidly changing U.S. market brought on by $4-per-gallon gasoline.
GM chairman and chief executive officer Rick Wagoner and top managers are finalizing additional restructuring moves and likely will announce details at the automaker's annual meeting Tuesday in Wilmington, Del., two people familiar with the plan told the Associated Press.
Key to the plan are the 19,000 hourly workers who signed up to leave the company by July 1 through buyout and early-retirement offers. GM yesterday announced that number of takers for the latest round of offers; it amounts to more than a quarter of the company's U.S. hourly workforce.
GM offered buyouts to all 74,000 of its U.S. hourly workers in February. The company never said how many it hoped would leave.
The world's largest automaker expects to replace some of the departing workers at a new entry-level wage of about $14 a hour - about half the rate paid to current production workers. The new wage rate, for up to 16,000 nonassembly workers, is part of the national contract negotiated with the United Auto Workers last year.
"This attrition program gives us an opportunity to restructure our U.S. workforce through the entry-level wage and benefit structure for new hourly employees," GM North America president Troy Clarke said in a statement yesterday.
GM has an auto-assembly plant in Newport, Del., near Wilmington, where it has about 1,400 union workers.
Already GM has announced that it will accelerate indefinite layoffs of one shift each at the Pontiac, Mich., and Flint, Mich., pickup truck assembly plants. The layoffs were to begin July 14 because of slow sales of the plants' products, the Chevrolet Silverado and GMC Sierra pickups.
Lehman Bros. Holdings Inc. auto analyst Brian Johnson predicted that GM would have to cut North American production 16 percent this year because of weak sales of trucks and SUVs.
Despite minimal truck production recently because of a strike at parts-maker American Axle & Manufacturing Holdings Inc., GM still had a 125-day supply of pickups and a 139-day supply of SUVs at the end of April, Johnson said. A 60-day supply is considered ideal in the industry.
"GM's inventories of large trucks have grown to worrying levels, and we expect GM to plan large production cuts over the remainder of the year," Johnson wrote yesterday in a note to investors.