General Motors Extends Summer Plant Shutdowns, Layoffs Likely to Follow

Matt Posky
by Matt Posky

If your current employment involves building a sedan for a domestic automaker, there’s both good and bad news awaiting you. General Motors is extending summer breaks at certain assembly plants and there may be an opportunity for some workers to extend that time off indefinitely, resulting in the least welcome vacations imaginable.

Stagnating sales and a bloated inventory is forcing GM to lengthen its traditional two-week summer shutdown to as many as five weeks for two U.S. factories, according to union officials. The affected plants are Lordstown Assembly, located in Ohio, and Kansas City’s Fairfax Assembly. Lordstown assembles the Chevrolet Cruze while Fairfax is responsible for the midsize Malibu, which has had a horrendous 2017. The Malibu had plenty of company in the doldrums, too. Through May, U.S. car sales were down 11 percent while truck and SUV sales rose by nearly 5 percent, forcing automakers to play favorites.

Speaking to The Wall Street Journal, United Auto Workers Local 31 president Vicky Hale claimed the Kansas City plant could be idled for up to five weeks, with job cuts likely to follow. Robert Morales, president of the Lordstown union, said his factory will stop production for the last two weeks in June, followed by another three weeks in July.

“It’s just to align with market demand, that’s all,” he explained on Wednesday.

After seven years of relatively consistent growth, overall demand for vehicles is slowing. Total U.S. deliveries are down 2 percent for May and industry analysts are suggesting 2017 won’t surpass 17.2 million units. Any expectation of topping last year’s record 17.5 million deliveries is now unrealistic — even if there are jobs depending on high sales volume.

The Lordstown plant, which saw a third shift cut at the beginning of the year due to lowered demand, employs roughly 3,000 workers. The Fairfax plant has about 3,500 workers. Hopefully, those numbers are unchanged after next month.

[Image: General Motors]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Mikey Mikey on Jun 15, 2017

    Short term shutdowns/ temporary lay offs, extended summer,and Christmas vacations are "facts of life" in automotive assembly operations. As an auto worker, you learn to live with it. Seven - eight week summer shutdowns were the norm, up to about the early 80's. When inventories/field stock numbers get too high, shutting down production is the most cost effective solution. Turning back line speed, and shift reduction is a longer term solution.... Temporary lay offs VS permanent layoff , is a win win, for all sides.

  • Truckducken Truckducken on Jun 15, 2017

    The Malibu. It's finally a decent car, at least when new, but after umpteen generations of garbage, it is hard to conceive of a name with less brand equity. They might as well call it the Yugo.

    • See 1 previous
    • JEFFSHADOW JEFFSHADOW on Jun 15, 2017

      General Motors had several chances to rename this automobile CHEVELLE, a name that has much more respect than Malibu. At least the heavy rock band utilizes the name in a swinging manner!

  • Varezhka I have still yet to see a Malibu on the road that didn't have a rental sticker. So yeah, GM probably lost money on every one they sold but kept it to boost their CAFE numbers.I'm personally happy that I no longer have to dread being "upgraded" to a Maxima or a Malibu anymore. And thankfully Altima is also on its way out.
  • Tassos Under incompetent, affirmative action hire Mary Barra, GM has been shooting itself in the foot on a daily basis.Whether the Malibu cancellation has been one of these shootings is NOT obvious at all.GM should be run as a PROFITABLE BUSINESS and NOT as an outfit that satisfies everybody and his mother in law's pet preferences.IF the Malibu was UNPROFITABLE, it SHOULD be canceled.More generally, if its SEGMENT is Unprofitable, and HALF the makers cancel their midsize sedans, not only will it lead to the SURVIVAL OF THE FITTEST ones, but the survivors will obviously be more profitable if the LOSERS were kept being produced and the SMALL PIE of midsize sedans would yield slim pickings for every participant.SO NO, I APPROVE of the demise of the unprofitable Malibu, and hope Nissan does the same to the Altima, Hyundai with the SOnata, Mazda with the Mazda 6, and as many others as it takes to make the REMAINING players, like the Excellent, sporty Accord and the Bulletproof Reliable, cheap to maintain CAMRY, more profitable and affordable.
  • GregLocock Car companies can only really sell cars that people who are new car buyers will pay a profitable price for. As it turns out fewer and fewer new car buyers want sedans. Large sedans can be nice to drive, certainly, but the number of new car buyers (the only ones that matter in this discussion) are prepared to sacrifice steering and handling for more obvious things like passenger and cargo space, or even some attempt at off roading. We know US new car buyers don't really care about handling because they fell for FWD in large cars.
  • Slavuta Why is everybody sweating? Like sedans? - go buy one. Better - 2. Let CRV/RAV rust on the dealer lot. I have 3 sedans on the driveway. My neighbor - 2. Neighbors on each of our other side - 8 SUVs.
  • Theflyersfan With sedans, especially, I wonder how many of those sales are to rental fleets. With the exception of the Civic and Accord, there are still rows of sedans mixed in with the RAV4s at every airport rental lot. I doubt the breakdown in sales is publicly published, so who knows... GM isn't out of the sedan business - Cadillac exists and I can't believe I'm typing this but they are actually decent - and I think they are making a huge mistake, especially if there's an extended oil price hike (cough...Iran...cough) and people want smaller and hybrids. But if one is only tied to the quarterly shareholder reports and not trends and the big picture, bad decisions like this get made.