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GM plants to take long production pause

Chrysler's fate

The Treasury Department is preparing a Chapter 11 bankruptcy filing for Chrysler that could come as soon as next week, people with knowledge of the action told the New York Times.

DETROIT — General Motors Corp. said Thursday it will temporarily close 13 assembly plants in the United States and Mexico — some for more than two months — laying off more than 26,000 workers to pare back a bloated inventory.

The closures, which will start in May, vary by factory from as short as three weeks to a long as 11, including the normal two-week July shutdown to change from one model year to the next.

GM said the shutdowns will help control high dealer inventories and bring manufacturing in line with sales. The company plans to cut production by 190,000 vehicles and reduce inventory from the current 767,000 to 525,000 by the end of July.

More than 24,000 hourly and salaried employees will be laid off at the affected assembly plants, but there will be thousands more layoffs and temporary factory closures when GM works out its schedules for engine, transmission and parts stamping factories.

Laid-off hourly workers will get unemployment benefits and supplemental pay from the company that amounts to most of their base wages. Salaried workers also will get some income, GM North America president Troy Clarke said.

Clarke said the shutdowns are not a sign that GM is headed into bankruptcy protection.

He also said the company isn't making the cuts because it sees sales worsening beyond current projections.

"Instead of spending the whole year to get the inventory in line, we really needed to get it in line much quicker," he said.

The longest shutdown is 11 weeks at Fort Wayne, Ind., which makes the Chevrolet Silverado and GMC Sierra pickup trucks.

Clarke said that President Barack Obama's auto task force was aware of the shutdowns, but that the decisions were made by GM management.

Obama said through a spokeswoman that GM will have to make difficult decisions during its restructuring. "He is committed to standing behind GM during this process to achieve a strong, viable auto industry in the long term," the spokeswoman said.

GM's sales were down 49 percent in the first quarter compared with the same period last year. GM had a 123-day supply of cars and trucks at the end of March, according to Ward's AutoInfoBank, and a six-month supply of several models.

Locations affected

General Motors assembly plants that will be closed longer than the typical two weeks this year:

• Arlington, Texas

• Bowling Green, Ky.

• Detroit-Hamtramck, Mich.

• Flint, Mich.

• Fort Wayne, Ind.

• Lansing, Mich.

• Lordstown, Ohio

• Pontiac, Mich.

• Shreveport, La.

• Spring Hill, Tenn.

• Wilmington, Del.

• Wentzville, Mo.

• Silao, Mexico

GM plants to take long production pause 04/23/09 [Last modified: Friday, April 24, 2009 7:48am]
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