Business World

On the heels of 150 layoffs in January, General Motors Corp.’s Wentzville plant will suffer another hit in the coming months — and this one will be harder.

The automaker plans to slow the local plant’s production speed by this summer, which will spur job cuts for the second time this year, a senior plant official said.

"The initial estimation … is between 250 and 300" layoffs, said Bob Wheeler, the plant’s communications manager.

Compounding the news for GM’s nearly 2,000 local employees on Thursday was the company’s announcement that it will temporarily close 13 of its North American assembly plants, including Wentzville, for several weeks at a time. Wentzville’s operations will be idled for an extra three weeks beyond its typical two-week summer shutdown, but other plants could be face even longer closures.

In all, the moves mean GM will make 190,000 fewer vehicles.

"These are tough decisions but … we are moving faster and deeper" on changes, said Troy Clarke, GM’s North America president, in a conference call.

The automaker said it is making the changes for reasons that include aligning production with demand and reducing dealers’ high inventories.

GM’s sales were down 49 percent from a year ago through March, battered by a global economic recession, low consumer confidence and credit-availability troubles. Dealers had about 767,000 vehicles in inventory at the end of March, GM said Thursday, but the automaker hopes its production cuts will whittle that supply to 525,000 vehicles by the end of July.

GM’s plan is "one of the biggest (production) cuts we’ve seen," said Jesse Toprak, senior industry analyst for the automotive information website Edmunds.com. Given the economy, though, it’s not surprising, he added.

But whether the cuts are deep enough will depend on the next few weeks, Toprak said instant payday loans completely online.

If GM files for bankruptcy, that could further diminish consumer confidence, perpetuate even lower demand and require more cuts. A GM bankruptcy is "more likely to happen than not, but I don’t think it’s a certainty," Toprak said.

The administration of President Barack Obama has given GM until June 1 to cut costs and come to concessions with bondholders and the United Auto Workers. Thursday’s production announcement is related to those efforts, Toprak said. Wentzville’s plant, which makes full-sized vans, had been forced to cut back earlier this year. Since Jan. 4, the plant has been idled for five weeks.

The additional weeks of closure mean the plant will be idled from June 6 through July 26. GM announced the weeks of June 8, June 15 and June 22 on Thursday. The weeks of June 29 and July 6 are the typical summer shutdown. The final two weeks, starting July 13 and July 20, were already announced as time to shift work to Wentzville from a plant in Grand Rapids, Mich., Wheeler said.

During the idle, workers will receive state unemployment and supplemental benefits, Wheeler said.

Some workers, however, will face a more permanent layoff. GM plans to reduce the Wentzville plant’s production speed during the seven-week shutdown, Wheeler said. When workers return, they will assemble 32 vehicles an hour, slower than the current speed of 38 vehicles. With a slower line speed, the plant will need fewer workers.

The automaker changed the plant’s line speed once this year. About 150 workers were laid off when the speed was cut in January to 38 vehicles an hour from 42 vehicles.

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