Cuts On Way For Corvette Facility: January Layoff, Production Slowdown Planned
Source: Bowling Green Daily News
More job cuts are on the horizon at the General Motors Bowling Green Assembly Plant.
The plant intends to layoff 110 workers in January and shut down production for two weeks while it cuts Corvette production from 15 to 11 vehicles an hour.
The plant will also shut down its Cadillac XLR production during December, temporarily laying off about 30 employees who work on the XLR line. The layoffs in January affect both Corvette and Cadillac XLR production workers. The plant employs around 800 workers.
Plant officials informed employees of the cuts Friday morning.
"Most of our employees knew that more changes would be made to our production schedule, based upon more recent sales figures," said Andrea Hales, communication director for the Bowling Green plant. "I just don't know if they expected it to be as big of an impact as what we announced this morning."
The January cuts top a list of gloomy announcements for GM workers this month. Officials announced last week plans to close the plant for a week in December to re-evaluate inventory and lessen production numbers for the month. That shutdown is still scheduled to occur, Hales said.
And about a month ago, the Bowling Green plant closed for a week to slice Corvette production from 18.5 to 15 vehicles an hour, a move that resulted in about 70 lost jobs.
Plant officials plan to cut XLR production in 2009 but do not yet know details of the production cuts. Officials also are not sure if the Corvette line will face further cuts next year, Hales said.
"At this time, nothing is certain and we really just take it in stride and watch our sales figures, our sales results and the overall market," she said.
Corvette sales took a nosedive in the past few months. Sales plummeted about 53 percent in October compared to sales through October last year. Cadillac XLR sales decreased 56 percent this year compared to sales through October 2007 last year.
"Corvette sales, they were doing fairly well until the last few months," said Tom Wilkinson, spokesperson for General Motors. "A lot of luxury segments have been pretty heavily impacted."
A lack of consumer confidence due to a dwindling economy is to blame for the sales plunge, he said.
"The people who have the money are not spending it," he said. "And the people who don't have the money are having trouble getting credit."
General Motors recently reported a $2.5 billion loss in its third quarter for this year.
"Third quarter earnings in industry sales are very, very low right now," Wilkinson said. "By some measures, it's the worst industry (situation) since World War II."
The company plans to lay off about 3,600 workers and slow production at 10 assembly plants early next year, according to reports.
The Bowling Green plant will shut down the week of Jan. 5 and the week of Jan. 12, Hales said.
"It's an unfortunate situation," Wilkinson said. "But sales are running at a very low pace, and nobody is sure when they are going to pick up."
Automakers are requesting $25 billion in government funds for economic relief, according to reports.
The Energy Department has taken steps to offer $25 billion for the production of fuel-efficient vehicles, but automakers are lobbying the government for more loans to help repair the wounded automobile market, reports say.
"The U.S. government's actions to help stabilize the credit markets and eventually ease the credit crunch are an essential first step to the economy's and the auto industry's recovery," GM CEO Rick Wagoner said in a news release. "But further strong action is required."
Wilkinson said government-backed loans are critical "to get through the next year or so. We think the auto industry is absolutely worth supporting."
Still, GM officials believe the market will improve, and they are determined to keep the company afloat "so we're around to see that happen," Wilkinson said.
"Production cuts are difficult, but we need to keep the company viable," he said. "And we think the Corvette will definitely take off again."
And while doses of uncertainty and fear haunt those at the Bowling Green plant, workers are still holding onto hope.
"Our employees are hopeful that we will see a turnaround," Hales said. "If the market improves and we gain consumer confidence back, then we're here to build more Corvettes."