General Motors plans to idle 1,000 workers at its Spring Hill, Tennessee, assembly plant as it, like other automakers, continues to grapple with weakening sales and an uncertain market.
GM is still calculating how many permanent and temporary workers will be furloughed, company officials. The layoffs, which will start after Thanksgiving, will be indefinite.
The automaker also confirmed it will spend $294 million to update the factory to build a new compact sport-utility vehicle that will be sold by the Cadillac division.
The Spring Hill plant currently makes the Cadillac XT5 and GMC Acadia midsize SUVs, both of which have had strong sales this year. XT5 sales more than doubled compared with the first eight months of 2016, while Acadia sales are up 45%.
(Cadillac to slash sedan line-up, shift focus to SUVs. For the story, Click Here.)
But inventories of the SUVs have grown. GMC has enough Acadias to supply dealers for 105 days of sales, while Cadillac has a 68-day supply of XT5s, according to Ward’s Automotive. Automakers consider a 70-day supply to be optimal.
GM started racheting production last fall in effort to manage inventories in the face of falling sales of its passenger cars and weakening industry sales.
Last winter, GM has cut the third shifts at car factories including at Lansing Grand River Assembly Plant and the Lordstown Assembly Plant in Ohio, and the second shift at the Detroit-Hamtramck Assembly Plant.
(Click Here to see more about GM’s previous layoffs in Tennessee.)
GM also cut the third shift at its Lansing Delta Township SUV plant in May and also announced plans to cut the third shift at its assembly plant in Fairfax, Kansas. The automaker also is reportedly considering dropping six slow-selling models, including the Chevrolet Volt.
Through August, auto sales in the U.S. are down 2.7% this year, with much of the drop in car sales as the market continues to shift to SUVs. The strong sales of trucks and SUVs has helped GM protect its bottom line this year.
A strike by Canadian auto workers in Ingersoll, Ontario, however, has trimmed production of the Chevrolet Equinox and has led to sales at the engine plant in Spring Hill, which makes the four-cylinder engine used in the Equinox.
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The strike in Canada began Sunday night over job-security issues. Although bargainers are exchanging telephone calls and messages, no face-to-face talks are scheduled.