General Motors (GM) To Cancel Shift, Lay Off 1,000 Workers
Zacks Investment Research | Jun 19, 2017 09:59PM ET
General Motors Company (NYSE:GM) is scheduled to cancel a shift in its sedan plant at Kansas City, MI. This news was published in The Wall Street Journal. Following this move, about 1,000 employees will be retrenched amid a declining demand for passenger cars.
General Motors notified its workers that the third shift will be eliminated from late September.
Over the last seven months, the company has announced its plan to lay off more than 5,000 employees, across half a dozen U.S. factories, primarily due to slump in passenger car sales.
This sharp downturn in passenger car transaction is because of the rising gas prices and new launches from automakers. Per Autodata Corp., Malibu sales fell 30% till this May, while midsize cars were down 14%.
Per General Motor’s executives, they are adjusting their production schedules to avoid vehicle overproduction.
The company’s Kansas city factory manufactures a single passenger car model, i.e. the Chevrolet Malibu midsize sedan.
Incidentally, General Motors aims to increase its factory capacities for pickup trucks and SUVs. Recently, the company has announced to build a new shift facility at its Arlington plant, TX, which would support future vehicle production and enroll around 1,250 employees.
In recent years, it has also negotiated a few flexible terms with the United Auto Workers that makes it less expensive to dismiss workers than in the past market recessions.
General Motors has been forced to scale down or shut its manufacturing operations in some regions due to production constraints such as high costs and unfavorable currency translation effects.
The company has also decided to stop vehicle and engine production, and cut down on engineering operations in Australia by 2017-end due to the strength of the Australian dollar against the American dollar, high production costs, limited domestic market and a stiff competition.
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