General Motors has given layoff notices to as many as 1,100 workers at a factory in Lansing, Michigan, due to the plant’s elimination of a third shift at the Delta Township Assembly plant.
The move comes as GM trims production in May of its GMC Acadia utility vehicle. The factory in Michigan’s capital city currently employs 3,000 hourly workers and another 250 on salary. The factory will continue to produce two other utes, the Chevrolet Traverse and the Buick Enclave.
Production of the GMC Acadia will shift to another GM plant in Spring Hill, Tennessee. That factory will gain 650 jobs in the process. That plant will also produce the Holden Acadia, a version of the crossover that will be exported to Australia. In 2013, GM announced it was ending production in the Land Down Under, a move since copied by both Ford and Toyota.
Some of the workers at the Michigan plant could be offered transfers to Tennessee, though GM has not provided specific details.
(GM adding third shift at Tennessee plant. Click Here for the story.)
The Delta Township factory won’t close entirely, thanks to the decision to build the next-generation versions of the Chevrolet Traverse and Buick Enclave there. Those two models are benefiting from the huge surge in demand for all sorts of utility vehicles. Combined with pickups and vans, light trucks accounted for nearly two-thirds of the total U.S. new vehicle market last month.
The United Auto Workers Union has been pressing GM to find a new product to replace the Acadia at the Michigan plant. With a nearby factory, the Lansing Grand River plant, building passenger cars for the maker’s upscale Cadillac brand, some observers believe Delta Township could get one of the new SUVs Caddy is currently developing. To adapt to the rapid shift in market demand, the luxury marque plans to add as many as three more utes during the next three to four years.
Some sort of move seems likely, considering GM has invested more than $580 million in the Lansing operation since just 2014, much of that intended to improve productivity and flexibility allowing for several different types of products to roll down the same assembly line.
GM is working to update its existing SUV products, as it has seen some of them lose momentum in recent months. Sales of the Traverse fell nearly 3% in 2016, while demand for the Enclave slipped about 16% compared to 2015.
(Click Here for more about GM investing $27 million into Spring Hill plant.)
Those were two of the rare losers last year in an SUV-happy market. Booming demand kept U.S. sales from declining sharply in February of this year. Sedans, coupes and other passenger car models, however, have been on a rapid decline, the midsize Chevrolet Malibu, for example, falling 24% compared to February 2016.
Weak passenger car demand led GM to cut 500 jobs at the Grand River plant in January. The maker is operating its small car factory in the Detroit suburb of Orion Township on just one shift – though it hopes to boost operations there with the launch of its new, long-range Chevrolet Bolt EV.
GM isn’t the only maker cutting production. Fiat Chrysler has temporarily closed two plants, one in Illinois that had built its Dodge Dart sedan, the other in suburban Detroit where the Chrysler 200 sedan was assembled. Both those factories are being retooled to handle new truck products. FCA has also idled a plant in Toledo, Ohio, as it prepares for the next-generation Jeep Wrangler.
Ford, meanwhile, is transferring small car production out of the Detroit suburb of Wayne and down to Mexico, a move that led to a war of words with President Donald Trump. But that factory will be converted to build new truck models, such as the reborn Ford Bronco SUV and Ranger pickup.
(To see more about GM idling five plants temporarily, including Lansing, Click Here.)
Industry analysts are watching to see if U.S. vehicle sales, overall, will continue to slip in the months to come, a problem that could lead to further industry layoffs.