General Motors Laying Off 510 Workers

Drop in small car demand due to low gas prices forces cuts.

by on Nov.12, 2014

GM is laying off 350 workers at its Lansing Grand River plant in Lansing, Mich. However, they may be recalled when Camaro production is moved there next year.

The low gas prices that have benefitted sales of full-size pickups and SUVs has also cut demand for small cars and as a result forced General Motors to lay off 510 hourly workers at two plants in Michigan that produce small cars.

The average price for a gallon of gasoline is now $2.923 cents per gallon, according to the AAA Daily Fuel Gage as the price of gasoline dropped by almost a penny. Last month, Americans were paying $3.208 cents per gallon. The prices are part of the reason buyers are finding their way back to trucks, crossovers and SUVs, which is resulting in more production capability than demand at the sites.

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The automaker is laying off 350 employees at its Lansing Grand River Assembly facility in January and 160 more at its Orion Assembly plant. The two sites produce a variety of small cars, including Cadillac ATS and CTS in Lansing and the Buick Verano and Chevy Sonic in Orion.

However, it’s likely the layoffs in Lansing are temporary, according to GM officials. Production of the Chevrolet Camaro is moving from the automaker’s plant in Oshawa, Ontario, to the Lansing site. When that occurs, those workers will be recalled. However, officials haven’t revealed when that move will take place.

The moves are designed to align plant production with demand for the vehicles produced at the plants.

GM reported ATS sales were down 6.3% in October and 18.9% through October. CTS sales were up 49.5% last month, but that banner result was only good enough to cut the drop in year-to-date sales 1.8%.

(Glut of Saudi oil causing price drop at pumps. For more, Click Here.)

Cadillac dealers had 166 days’ supply of the ATS at the end of September, and 161 days’ supply of the CTS, which forced the production cuts at the Lansing facility.

(Click Here for a first look at the Cadillac ATS V-Series.)

In the case of the Orion plant, sales of the Sonic fell 23.2% in October; however, they are up 8.8% through October. The Verano dropped 7.3% last month and are down 6.2% for the year-to-date.

(To find out what GM knew about its ignition problem and when it knew it, Click Here.)

“We’ll be having a phased layoff beginning in January and conclude by the end of 2015,” said Chris Bonelli, a GM spokesman for the plant, told the Detroit News. The head count reduction is permanent, but could be offset by retirements and attrition.

Conversely, all of GM’s large trucks, crossovers and SUVs enjoyed double digit sales increases. The company’s full-size pickup line was up 13% in October while the Cadillac Escalade was up 18%, while Chevrolet Tahoe and Suburban retail sales up 18% and 9%, respectively. GMC Yukon and Yukon XL retail deliveries were up 49% and 51%, respectively. The Chevy Traverse was up 24% and its Buick cousin, the Enclave, was up 1.8%.

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2 Responses to “General Motors Laying Off 510 Workers”

  1. Jorge says:

    None of the mentioned GM models are exactly high volume models so it’s probably less to do with fuel prices and more to do with consumer choice, regardless of what GM states. Demand for trucks and SUVs shows consumers in the U.S. desire large vehicles even when they don’t actually need them.

  2. EAJ says:

    Agree Jorge. Not sure if you’ve been in an ATS but it is hella small. And unfortunately the CTS’ styling has turned off people. With a too small ATS and somewhat fugly CTS potential buyers are looking to the last-gen CTS or stepping up to a SUV, truck, etc.

    But funny thing is, there hasn’t been a rise in larger vehicle sightings in my neck of the woods or others I frequent. And it seems whenever there is a report of a drop in petrol prices they go up 10 – 20 cents in my area within a couple days.

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