The General Motors Corporation has announced on Friday that it plans to idle all of its assembly plants in the United States and Canada, for a part of the first quarter, and would build 250,000 fewer cars and trucks than it had originally planned.
Marking one of its largest widest shutdowns, GM plans to close plants for about a month, across various times over the first quarter. It also plans to extend the annual Christmas holiday through January at some plants.
The car company will now build around 60 per cent fewer vehicles in the first quarter, compared to the 885,000 it made during the same period of 2008.
"Every plant in North America has some type of action related to it," GM spokesman Tony Sapienza was quoted as saying, terming it as an "utter collapse" of the market that was not specific to GM or to US automakers. "People just aren't buying cars right now" he said.
But GM has suffered the most after Chrysler. GM has said it might run out of funds if not bailed out by a $10 billion federal package that it is seeking from the government this month (See: Bush may open bailout kitty for automakers). The car maker's sales were down 43 per cent in October and November, against a 34 per cent industry-wide decline over all.
A message on the website of United Automobile Workers (UAW) union Local 276 in Arlington, Texas, advised members that they would be off work starting 23 December, for almost a month till 20 January. It also said that the same would happen for a week during March. The Arlington workers typically build sports utility vehicles.
In all 14 plants are affected, and the only GM plant unaffected by the idling announcement in the United States or Canada is the one in Lordstown, Ohio. Sapienza said Lordstown had already had two weeks of down time scheduled in January. Another three plants in Mexico would also be idled.
Japanese car maker Honda too said that it would cut production in North America from January 2009 through March 2009 by around 119,000 vehicles. It said it now plans to make 1.29 million vehicles during this fiscal which ends this March,lower than its earlier projection of 1.47 million. Recession and tight credit have plummeted sales to levels lowest in 25 years.
A week ago, Toyota Motor Corp. had also announced additional production cuts by expanding the number of non-production days at all of its facilities. Around the same time, GM said it would lay off around 2,000 workers in early 2009 and cut shifts at three of its plants in February.
It said that the speed and severity of the decline in the auto market has been unprecedented on account of the collapse of the financial markets and a resultant drying up of vehicle financing.