General Motors Co. will temporarily idle the Detroit-Hamtramck Assembly plant to adjust for slowing demand for compact cars and sedans. GM builds four car models there.
The plant will see reduced production starting Oct. 20, leading up to a Nov. 20 shutdown that’s expected to last through the end of the year, company spokesman Tom Wickham said Thursday.
It’s a move to reduce production in response to slowing demand, Wickham said. The company has moved to reduce car inventory in recent months, as the sales have cooled and buyers increasingly shop for SUVs and trucks.
The plant on the Detroit-Hamtramck border employs 1,600 hourly workers and has 200 salaried positions. GM let go 638 temporary workers there earlier this year.
Detroit-Hamtramck Assembly builds the Chevy Impala, Chevy Volt, Cadillac CT6 and Buick LaCrosse. It’s having a hard time moving most of those off dealer lots.
The Impala had 68 days worth of supply at the end of September, not a cause for concern. Sixty days worth of inventory is considered healthy.
But the CT6 produced at the plant was at 115 days supply in September, up from 97 days in the same month a year ago, according to Autodata Corp. The plug-in hybrid Chevy Volt was at 102 days’ supply at the end of September; that’s up from 68 days the same month a year ago. And there is nearly a 10-month supply of LaCrosses sitting on lots.
Overall, GM had 76 days supply for its entire car segment, according to Autodata Corp. The company has said it has plans to trim its overall inventory to the low- to mid-70 days range by the end of the year, with fewer cars and more trucks and crossovers as part of its mix.
Carmakers are making a number of strategic decisions to bolster profitability, strengthen balance sheets and adjust vehicle lineups as sales slow after record years. Some are cutting production and others have killed small cars.
Analysts have said GM has been slower to adjust to slowing sales – particularly for small cars – than its domestic competition. Layoffs have hit GM plants in Michigan particularly hard: GM has furloughed about 3,450 hourly and salaried workers at three car factories in Michigan and at a Michigan transmission plant since January, including the elimination of about 1,300 temporary workers.
GM has cut shifts at two Lansing plants and at Detroit-Hamtramck Assembly; that’s when Detroit-Hamtramck’s 638 temporary workers were let go. The other GM workers at those plants have been placed in other GM positions or remain on layoff.
Across the U.S., GM has laid off at least 4,500 U.S. workers since January and another 1,050 were slated to be let go in September. And the automaker reportedly is considering eliminating at least six car models from its U.S. portfolio.
GM at the beginning of June said downtime in the second half of the year related to new vehicle launches would cut about 100,000 vehicles from overall inventory levels. It said it would continue to monitor supply and sales and would make additional production adjustments if necessary.
Ford Motor Co., meanwhile, has planned shutdowns of a week or more at multiple North American plants, including Flat Rock Assembly and Michigan Assembly.
The Ford shutdowns will affect plants that make the Fiesta, Fusion, Mustang, Transit and Focus, as well as the Lincoln MKZ, all of which have had sales declines through the first eight months of 2017.