GM announces plan to cut shift in Pontiac
Web-posted Oct 19, 2007
By JOSEPH SZCZESNY
Of The Oakland Press
General Motors Corp. has confirmed it plans to halt production of the second shift at the Pontiac Truck plant in May.
Tom Wickham, GM spokesman, said not all the details of the planned cut have been worked out. However, he said, GM's management decided to tell employees early on that the cutback was in the works.
The cutback could leave between 800 and 900 members of UAW Local 594 out of work indefinitely.
Union officials were the first to notify the GM employees of the impending cut Thursday afternoon.
The downturn in the housing market has hurt the segment, and Toyota has managed to double its market share in the segment with the introduction of its new Tundra pickup truck, he said.
The planned cut suggests that GM expects the U.S. economy to post relatively slow growth next year. Both Chrysler and Ford Motor Co. will be rolling out new pickup trucks late next year.
"We regret to inform you that on Thursday, October 18 manufacturing manager Bill Boggs informed the leadership that due to declining demand for heavy duty pickup trucks, the second shift will cease operation effective May 1, 2008. This is definitely not the kind of news we wanted to hear," the flier said.
The employees were surprised by the cuts, which come only a week after the UAW ratified its new labor agreement with General Motors, one union member told The Oakland Press.
The contract included a provision that committed GM to begin production of a new C3XX fullsize pickup truck at the Pontiac truck assembly plant beginning in 2012, according to the contract summary released by the UAW.
GM also had cut production at the plant in early September when it laid off permanently more than 450 temporary employees.
Wickham said GM has picked up about four-tenths of a point in market share in pickup truck sales this year even total pickup truck sales dropped 2.3 percent. GM sales, however, have dropped 1.3 percent and the company's management is concerned about an inventory build-up, Wickham said.
"We believe we've got to make sure this doesn't get away from us," he said.
Earlier this week, GM announced plans to cut the second shift at the company's Detroit-Hamtramck plant because of slow sales of the Buick Lucerne and Cadillac DTS. GM plans to idle the second shift at the Hamtramck plant in early January.
Tom Libby, senior director of industry analysis at the Power Information Network, said this week the pickup truck segment remains one the largest, most competitive and most significant in the industry.
The segment also is the source of profits for North American manufacturers such as GM, he said.
Contact staff writer Joseph Szczesny at (248) 745-4650 or joe.szczesny@oakpress.com.
