DETROIT – Shifting demand from cars to trucks and SUVS is forcing General Motors to lay off more than 2,000 workers indefinitely at two assembly plants in Ohio and Michigan starting in January.
The company said Wednesday it will suspend the third shifts at factories in Lordstown, Ohio, and in Lansing, Michigan, because of the market change, which is growing and shows no sign of abating.
The layoffs were announced the same day the automaker said it would invest more than $900 million at locations that include a Bedford, Indiana, casting plant.
About 1,250 workers will be furloughed at the Lordstown plant, which makes the Chevrolet Cruze compact car, starting Jan. 23. An additional 840 will be idled at the Lansing Grand River factory, which makes the Chevrolet Camaro muscle car and the Cadillac ATS and CTS luxury cars, when their shifts end Jan. 16.
“It’s supply and demand, and right now the demand is not there for what we have,” said Glenn Johnson, president of a United Auto Workers union local at the Lordstown plant east of Cleveland.
Last month, 61.6 percent of U.S. new vehicle sales were trucks and SUVs, according to Autodata Corp. That’s a record that is likely to be broken said Jeff Schuster, senior vice president for forecasting at the consulting firm LMC Automotive.
Because of the shift, it’s likely the GM layoffs won’t be the last at auto factories that build cars only in the slowing compact, subcompact and midsize segments, Schuster said. “It’s not inevitable but the likelihood is certainly higher,” he said.
GM produces Chevrolet Silverado and GMC Sierra models at its Allen County truck assembly plant.
Americans have been moving away from cars toward trucks and SUVs for several years as gas prices have dropped to near $2 per gallon and the larger vehicles have become more efficient.
Sales of the Ohio-manufactured Cruze are down nearly 20 percent this year even though a new version is only in its second year of production. Of the vehicles made in Lansing, ATS and CTS sales each are down about 17 percent this year, while Camaro sales are off 9 percent.
GM doesn’t know when the workers will be called back, spokesman Tom Wickham said. Laid-off workers will get supplemental pay and state unemployment benefits that will amount to most of their wages for a year.
GM said it plans to invest more than $900 million at a Toledo transmission plant, the Lansing Grand River factory and the casting plant in Bedford to prepare for undisclosed new vehicles. The investment will preserve jobs but not create new ones.