GM to cut truck shifts, leading to layoffs

The Flint, Pontiac and Oshawa plants make the Chevrolet Silverado and GMC Sierra pickups, while Janesville manufactures the Chevrolet Tahoe and Suburban and GMC Yukon big SUVs.

GM said pickup sales overall are down 15 percent through March, while sales of large SUVs are off 26 percent. Dealers in much of the country say the bigger vehicles aren’t selling because of the economy and gasoline prices.

George Tasker, the top salesman at Martin Chevrolet in Torrance, Calif., said buyers are sitting on the sidelines for most vehicles mainly due to economic uncertainty and declining home values.

“Everybody’s going to drive a little bit longer until we can figure out where this thing is going,” he said.

Los Angeles-area dealers still can get just about any truck or SUV a customer wants by trading with each other, despite curtailed production from the American Axle strike, he said.

Jesse Toprak, chief industry analyst for the auto information site Edmunds.com, said GM has a 92-day average supply of large trucks. A 60-day supply is considered optimal in the business.

He said the automaker will lose about $4.4 billion in gross sales because of the production cuts, but it’s nearly impossible to determine the impact on GM’s net profits.

The production cuts should help GM keep its inventory under control, said Catherine Madden, an analyst with the consulting firm Global Insight.

“They’re not going to put themselves in a position where they’re going to overbuild and sell at any costs,” she said.

“They take the hit now instead of being forced with their back up against the wall in September.”

GM said it did not forecast how many of those vehicles it expected to make this year, but it sold about 1.1 million of them in the U.S. last year, according to Autodata Corp.

The announcement was made after the close of regular trading. GM shares gained 56 cents, or 2.6 percent, to close at $21.94, and were unchanged in after-hours trading.

The cuts come as 74,000 U.S. workers represented by the United Auto Workers face a May 22 deadline to decide on GM’s latest round of buyout and early retirement offers.

GM won’t say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing nonassembly jobs with new employees who will be paid half the old wage of $28 per hour.

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