GM to Shut US Plants for 2 Months

csv8 · 23-04-2009, 05:13 PM

GM to Shut US Plants for 2 Months
By TOM KRISHER

DETROIT (April 23) — General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, two people briefed on the plan said Wednesday.
Auto sales are falling as cash-strapped consumers cut back on purchases. Click through the gallery to see last month's sales figures for the leading auto manufacturers.
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The exact dates of the closures were not known, but both people said they will occur around the normal two-week shutdown in July to change from one model year to the next. Neither person wanted to be identified because workers have not been told of the shutdowns.
GM spokesman Chris Lee would not comment other than to say the company notifies employees before making any production cuts public.
The automaker is living on $13.4 billion in government loans and faces a June 1 deadline to cut its debt, reduce labor costs and take other restructuring steps. If it doesn't meet the deadline, the company's CEO has said it will enter Chapter 11 bankruptcy protection.
United Auto Workers officials at several factories said they have meetings scheduled Thursday and Friday with plant managers and GM human resource officials to discuss production changes.
The automaker's sales were down 49 percent in the first quarter compared with the same period last year, and GM had a 123-day supply of cars and trucks at the end of March, according to Ward's AutoInfoBank. GM already has more than a six-month supply of several models.
Copyright 2009 The Associated Press.
"Not looking good for GM"

Dave_au · 23-04-2009, 05:49 PM

They had a 273 day supply of Pontiac G8s (ie our commodore) in November

XR8putts · 23-04-2009, 06:29 PM

Crikey..

Sprint XR8 · 23-04-2009, 06:41 PM

GM plans to close 15 plants for 9 weeks

DETROIT — In what appears to be a record voluntary shutdown, General Motors (GM) plans to essentially quit making cars and trucks in the U.S. for nine weeks from mid-May through July.
According to two sources with direct knowledge, who did not want to be identified because no official announcement had been made, the plan is to shut 15 of GM's 21 North American car and truck assembly plants, most of them in the USA.

GM will meet with United Auto Workers leaders today and Friday to spell out details.

The dramatic furlough also could whipsaw through the larger economy as GM quits buying parts from suppliers, and its workers, now even more worried about their jobs, quit spending.

"There could be failures in lots of different industries as a result of this," says Mark Zandi, chief economist at Moody's Economy.com. "One lost job at GM can result in up to 10 lost jobs elsewhere."

If the GM halt puts some struggling parts makers out of business, other automakers who rely on the same network of suppliers also could be hurt.

Union workers laid off will get about 72% of pay from state unemployment, plus "supplemental unemployment benefits," a GM-paid union benefit.

There will be a significant blow to GM's finances, which have already been battered by the downturn in car sales. Automakers book revenue when they produce and ship vehicles to dealers, not when the cars are sold to customers. That means GM's revenue will shrivel for the nine-week period.

GM is surviving on $13.4 billion in federal loans. The government says it will decide by June 1 whether GM is restructuring fast enough to qualify for more loans.

Such an extended production halt could be "a sign that (GM) bankruptcy is more likely, rather than less likely," says Stephen Spivey, senior auto analyst at research company Frost & Sullivan.
http://www.usatoday.com/money/autos/...shutdown_N.htm

EDManual · 24-04-2009, 09:01 AM

What a joke that workers get 72% of their pay plus more unemployment benefits! No wonder the country and companies are going bad. It shouldnt matter if someone earns 30k a year or 100k a year, you should only get a standard dollar rated unemployment benefit like here.

unions are organising this I guess...

Joe5619 · 24-04-2009, 09:22 AM

What kills me is how en slow they are to react to the slow down in the market. How many months of 50% + drops did they need? I can understand a week here,a week there, but 2 full months in a row is just suggust bad maanagement. 15 plants for 2 months in the mid of the year!!!

csv8 · 24-04-2009, 10:13 AM

General Motors to shut 13 plants for 'multiple weeks'

* April 24, 2009 -

General Motors said on Thursday it will shut down 13 North American plants over several weeks this year to align auto production with weaker demand.

The struggling Detroit auto giant said in a statement that "due to certain business developments, it is scheduling multiple down weeks at 13 assembly operations in North America."

This will reduce production by some 190,000 vehicles in the second and early third quarter of this year, GM said.

Without offering a detailed schedule, GM said the shutdowns "are staggered and vary in duration, based on current inventory levels and expected demand for the products."

"Dealer vehicle inventories are at high levels, given the current depressed market," the company statement said.

"The shutdown will allow GM the opportunity to bring production in line with current market demand."

GM said another factor in the shutdowns is the "possible production implications of the complicated and difficult negotiations with Delphi," its former parts subsidiary, which is in bankruptcy court.

"We're taking aggressive steps to accelerate our inventory initiatives that have worked well since the first of the year," said GM North America president Troy Clarke.

"While sales have been performing at or close to our plan estimates, and dealer inventories have been reduced accordingly, we want to more closely align inventories with even more conservative market assumptions.

"By reducing our inventories even more aggressively we reduce pressure on GM and our dealers, and set ourselves up well for a clean 2010 model year start-up," Clarke added.

The embattled auto firm, which is set to receive $US5 billion ($A7.1 billion) on top of the $US13.4 billion ($A19.02 billion) in loans already received from the US government, is working on a 60-day deadline provided by the White House to come up with a new viability plan or face bankruptcy.

President Barack Obama's administration has given GM until June 1 to present an aggressive restructuring plan, after the government rejected its previous proposals in late March.

The firm has said it wants to avoid filing for bankruptcy protection, but is preparing for it nevertheless.

The automaker has also announced it will slash 1,600 white collar jobs by May 1.

Rev28K · 24-04-2009, 10:17 AM

I read on another forum this morning that the Pontiac brand was going on to the "death" list in a big GM restructure. It's joining SAAB and Hummer on the list.

Sprint XR8 · 24-04-2009, 10:41 AM

Pontiac Is Dead

DETROIT — According to a source at General Motors, the company will announce next Monday its new "faster, deeper" reorganization plan, which will likely include a death sentence for the Pontiac brand.

Inside Line called Tom Wilkinson, news relations PR man for General Motors, who said: "There's nothing I can share with you at this time. Keep your eyes on our media site. Officially, nothing has changed with Pontiac's niche-brand status, until you hear differently."

The one-time "Excitement" division and creator of legends such as the GTO and Firebird was relegated to "niche" or "specialty" brand status by General Motors in its first viability plan in December of last year.

The company toyed with competing proposals to either turn the brand into GM's version of Scion or to make Pontiac a very focused purveyor of performance cars based around the critically well-received G8. But ultimately, Pontiac was chosen as the easiest to kill since it was cut from GM's self-defined herd of four "core brands," Chevrolet, Cadillac, GMC and Buick. Most Pontiac franchises have already been combined with Buick and GMC.

If true, Pontiac will join Saab, Saturn and Hummer as brands that will not survive GM's current troubles — at least not as a component of General Motors.
http://www.edmunds.com/insideline/do...ticleId=146706

Wally · 24-04-2009, 05:22 PM

I suspect they won't be the only one looking at plant sleeps:

Quote:

BY BRENT SNAVELY • FREE PRESS BUSINESS WRITER • April 24, 2009

After pushing the message that "Ford is different" from its struggling domestic rivals, the Dearborn-based automaker is expected to report a first-quarter loss today and reveal how much cash it has left to survive the economic downturn.

Ford is expected to report a loss of $2.8 billion, or $1.24 per share, according to the consensus estimate of 14 analysts surveyed by Thomson One Analytics.

Ford posted a record $14.6-billion loss in 2008, and the automaker doesn't expect to earn a profit until 2011, according to its annual report. But its image has benefited from the fact it hasn't borrowed money from the U.S. government. Crosstown rivals General Motors Corp. and Chrysler LLC are operating on $17.4 billion in loans.

"We like being independent, and we plan to remain that way," Ford Executive Chairman Bill Ford told Larry King on CNN Tuesday.

Ford is racing to cut costs across every corner of its operations to stay ahead of the global recession, but some analysts say they remain concerned it won't be enough.

Ford shaved about $1 billion by modifying its labor agreement with the UAW and cutting interest expenses through a successful debt restructuring. The automaker also is working with its dealers to save $300 per vehicle in marketing and other costs.

Ford's stock price has more than doubled since March 6, when it closed at $1.70. On Thursday, Ford's stock closed at $4.49.

Since January, Ford's sales of cars and trucks have declined 43.3% in the United States, its most critical market, compared with 38.4% for the industry, according to Autodata Corp. In Europe, Ford's sales declined 16.3% compared with 16.9% for the industry, according to JATO Dynamics.

With global sales at such low levels, Standard & Poor's warned that Ford might not have enough cash left to run its business by the end of 2009.

Analysts estimate that Ford needs $8 billion to $10 billion to operate. At the end of 2008, Ford had $24 billion in cash and credit. But some analysts estimate that Ford is burning through $1 billion a month.

So experts will be closely eyeing Ford's cash levels today.

"We expect Ford's cash use to continue relatively unabated through the end of this year and perhaps into 2010," Robert Schulz said in Standard & Poor's report.

Credit Suisse equity analyst Chris Ceraso estimates that Ford burned through $4 billion over the past three months.

"Working capital is the big wild card here," Ceraso said in an April 17 report.

Another threat facing Ford is a GM or Chrysler bankruptcy. A filing by either rival could disrupt Ford's parts suppliers and cause vehicle prices to plummet if thousands of vehicles are liquidated, said Bruce Clark, senior vice president of the corporate finance group for Moody's, a debt rating service.

z80 · 24-04-2009, 06:53 PM

It is innevitable that there will be mass sackings, voluntary redundancies etc.

Australia is 6 to 12 months behind.

Sad, but realistic.

Ohio XB · 24-04-2009, 09:56 PM

Quote:

Originally Posted by Wally

I suspect they won't be the only one looking at plant sleeps:

The guy that wrote that article doesn't seem to have all of his facts straight.

Ford has reduced their debt by $9.9 billion, not $1 billion.

Ford is saving about $1 billion in labor costs a year due to new contract concessions and reductions in force.

Ford is saving $500 million a year in interest payments alone due to debt restructing.

It's nice of the reporter to state that Ford's first quarter sales were down 43.3% while industry average was down 38%, but he attempts to illustrate that Ford is doing worse than everyone else by stating the industry average. But, it is an AVERAGE, which means some are higher, some are lower. He didn't mention that the media darling Toyota's sales were off 36% in the same period.

http://money.cnn.tv/2009/04/17/autos...ion=2009041709

Better, but certainly not good.

Quote:

What a joke that workers get 72% of their pay plus more unemployment benefits! No wonder the country and companies are going bad.

Just to clarify, the report says "Union workers laid off will get about 72% of pay from state unemployment...."

I don't understand that, maybe it is a State thing. Here in Ohio you only get 50% from State unemployment.

As far as sub-pay goes, yes, we also get a check from the manufacturer as well. Its a good benefit if you can get it. I don't know how it got agreed upon (before my time), unless it was during the booming time of the industry and the companies couldn't see a time when they would have lay-offs, but I am just speculating based on experience.

We are expecting sub-pay to go away after new contract agreements with GM.

Steve

4Vman · 24-04-2009, 10:06 PM

Wally likes grabbing Ford propaganda "headlines" to counter or offset anything negative towards GM regardless of their accuracy...

Wally · 24-04-2009, 10:21 PM

It comes from being numb to blind faith. :hihi: Yin and Yang 4Vman, yin and yang. The truth is that all my prophesies on this forum have come true, you're batting about 100.

Can I also remind everyone that this is a Ford discussion forum, not an anti holden one. It's boring reading about the demise and burial of Holden.... who cares, I'll just go buy a BMW, Merc or something and the holden workforce can go on the dole.

4Vman · 24-04-2009, 10:42 PM

Quote:

Originally Posted by Wally

It comes from being numb to blind faith. :hihi: Yin and Yang 4Vman, yin and yang. The truth is that all my prophesies on this forum have come true, you're batting about 100.

Can I also remind everyone that this is a Ford discussion forum, not an anti holden one. It's boring reading about the demise and burial of Holden.... who cares, I'll just go buy a BMW, Merc or something and the holden workforce can go on the dole.

Your blind faith stems towards anything GM...
Yes and its not an anti Ford Forum either.. so why exactly do you chat here??

Ohio XB · 24-04-2009, 10:51 PM

From that same article...

Quote:

Ford is expected to report a loss of $2.8 billion

This has been touted through out the media, however Ford has just announced a $1.4 billion loss, once again (though not good) outperforming the professional "guessers".

My mistake, labor costs were reduced by only $500 milion a year, per the quarterly report.

And it's yinyang. To say "yin and yang" is to separate what is meant to be a whole. Neither is anything without the other and the principle of yinyang is to illustrate this point. Everything exists but for the existance of it's opposite. Without it there is nothing.

No hot without cold. No fast without slow. No powerful without weak. Everything needs it's opposite to define it.

This has been a specific subject of research of mine, as well as practice, for what it's worth.

Steve

mik · 25-04-2009, 12:20 AM

reading those articles in the back of my mind, a 2 month closure.......have we seen this before? a factory shuts down for x amount of time to "reorganise" then a a few days before its due to start up they suddenly decide its a lost cause and will be closing doors for good, i hope this is not the case, i guess we`ll have to wait and see.

greenfoam · 25-04-2009, 04:35 AM

This needs to happen, alot of companys need to go to crap so the world can reorganise itself into a leaner more efficient kind of place. It's not a bad thing at all just make sure you have that veggie garden in the backyard/front yard growing well so you can be sure to get through it

Wally · 25-04-2009, 08:39 AM

Quote:

Originally Posted by 4Vman

Your blind faith stems towards anything GM...
Yes and its not an anti Ford Forum either.. so why exactly do you chat here??

You still haven't figured it out have you.

I'm here because I own a falcon and I wanted to share knowledge, which has been dented by various viscious members who won't let me do so without ridicule.

4Vman · 25-04-2009, 08:56 AM

Quote:

Originally Posted by Wally

You still haven't figured it out have you.

I'm here because I own a falcon and I wanted to share knowledge, which has been dented by various viscious members who won't let me do so without ridicule.

whats been dented? the car or your GM ego?

Sprint XR8 · 25-04-2009, 11:15 AM

Quote:

Originally Posted by Wally

I suspect they won't be the only one looking at plant sleeps:

Ford to Boost Production
04/24/09 - 01:02 PM EDT

Confident Ford(F Quote) plans a slight boost in its production rate, a positive sign in a questionable economy.
The automaker, which reported Friday that it beat first-quarter estimates and reduced its cash burn, plans to build 435,000 vehicles in North America during the current quarter. That is 250,000 fewer than last year, but 10,000 more than the company's earlier guidance.

"We believe we have the dealer stocks well in line with what we see with the reception of new products," said CEO Alan Mulally, on an earnings conference call Friday. "We believe we can go up a little bit more to support the real demand."

The announcement comes a day after General Motors(GM Quote) said it has scheduled shutdowns at 13 of its 21 assembly plants in North America during the next three months, in an effort to remove 190,000 vehicles from production. It provides one more boost in Ford's continuing effort to separate itself from its competitors.
http://www.thestreet.com/story/10491...cm_ven=GOOGLEN

Wally · 25-04-2009, 06:15 PM

Quote:

Originally Posted by Ohio XB

From that same article...

And it's yinyang. To say "yin and yang" is to separate what is meant to be a whole.

Steve

Isn't it a harmonious balance between the female cosmic principle yin and the male cosmic principle yang, with yang (holden) being the dominant half?

Nikked · 25-04-2009, 08:53 PM

Quote:

Originally Posted by coupex

Ford to Boost Production
04/24/09 - 01:02 PM EDT

Confident Ford(F Quote) plans a slight boost in its production rate, a positive sign in a questionable economy.
The automaker, which reported Friday that it beat first-quarter estimates and reduced its cash burn, plans to build 435,000 vehicles in North America during the current quarter. That is 250,000 fewer than last year, but 10,000 more than the company's earlier guidance.

"We believe we have the dealer stocks well in line with what we see with the reception of new products," said CEO Alan Mulally, on an earnings conference call Friday. "We believe we can go up a little bit more to support the real demand."

The announcement comes a day after General Motors(GM Quote) said it has scheduled shutdowns at 13 of its 21 assembly plants in North America during the next three months, in an effort to remove 190,000 vehicles from production. It provides one more boost in Ford's continuing effort to separate itself from its competitors.
http://www.thestreet.com/story/10491...cm_ven=GOOGLEN

Oh Snap!

z80 · 25-04-2009, 09:56 PM

Quote:

Originally Posted by mik

reading those articles in the back of my mind, a 2 month closure.......have we seen this before? a factory shuts down for x amount of time to "reorganise" then a a few days before its due to start up they suddenly decide its a lost cause and will be closing doors for good, i hope this is not the case, i guess we`ll have to wait and see.

Exactly what I was thinking.

Gives them enough time to make arrangements to rationalize the workforce.

(And roll some plant and equipment off site)

Ohio XB · 26-04-2009, 12:46 PM

Quote:

Originally Posted by Wally

Isn't it a harmonious balance between the female cosmic principle yin and the male cosmic principle yang, with yang (holden) being the dominant half?

Neither yin nor yang can stand by itself. Without its opposite either is incomplete and therefore cannot function.

The yinyang symbol is 6000 years old and was created by mapping the sun's shadow through the four seasons. This page explains it quite well....

http://www.chinesefortunecalendar.com/yinyang.htm

As for the application of yinyang in Chinese culture, it shows the reliance of everything on its opposite and the connectivity of all that exists. Applying this to martial arts has long been a rule for effective methods of self defense. When the attacker exerts his aggression (yin) it is best countered by using his own exertion to parry or otherwise redirect or yield (yang) his attack to subdue him.

But this is a topic for another discussion.

Steve

Daymoe · 26-04-2009, 12:50 PM

Do you reckon now that Pontiac is dead, the price of Pontiac Trans AM's will raise in price?

Ohio XB · 26-04-2009, 12:51 PM

Quote:

Originally Posted by Nikked

Oh Snap!

I believe Ford is ramping up production just a little incase they are impacted by supplier trouble if GM and Chrysler go into bankruptcy. This way Ford will have some vehicles on the lot as people finally start buying more cars and Ford won't have to miss out on those sales. They have got their inventory very well situated.

Back when they were launching the 2009 F-150 they delayed production for 2 months in anticipation of trucks not selling. Once it hit the market they found they could not keep up with demand and had to add another shift. They over compensated for the market, and they admitted it. I think that lesson is still fresh on their minds.

Steve