Janesville33.9°

Cuts cost local GM jobs

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JAMES P. LEUTE
April 8, 2008
— Production cuts at the General Motors plant in Janesville are translating into job cuts as the automaker laid off between 160 and 200 workers Monday.

As a result of slowing sales of the full-size sport utility vehicles built in Janesville, the automaker announced late last year that it would trim production in Janesville from 52 jobs per hour to 44.


That “re-rate,” as it’s called internally, takes effect this week. The plant’s assembly line and operations have been retooled to accommodate the production cuts, and workers on both shifts gradually will work their production up to 44 SUVs an hour.


Those workers laid off Monday had the lowest seniority in the plant, spokeswoman Mary Fanning said.


If and when they’re called back to build Chevrolet Suburbans and Tahoes and GMC Yukon XLs and Yukons is undetermined, she said.


That’s because GM employees in Janesville and at other plants around the country are weighing early retirement and buyout offers the automaker made earlier this year. Workers have until May to decide whether to leave the plant.


“At this point, we have no idea how many people will sign up for the attrition program and how many people we’ll then need to supplement the line,” Fanning said.


If the laid-off workers aren’t called back to replace employees who leave voluntarily, there’s a chance they could return as summer replacements when the plant has a significant number of employees on vacation.


The Janesville plant is no longer the only plant making GM’s big SUVs to feel the effects of dropping sales and an excess of product on dealers’ lots.


Starting next Monday, GM will idle its Arlington, Texas, plant and 2,400 workers for three weeks as it tries to better align inventories with consumer demand.


Erich Merkle, vice president of auto industry forecasting for the consulting firm of IRN Inc. in Grand Rapids, Mich., said dealer inventories of Suburbans and Tahoes have dropped from a 142-day supply a month ago to 110, which is still significantly higher than the 60- to 65-day supply dealers prefer.


On the GMC side, however, dealer inventory has increased. Merkle said the most recent surveys indicate dealers have a 139-day supply of GMC Yukon XLs and a 146-day allotment of Yukons.


“That’s still way too high,” Merkle said.


While recent production in Janesville has been slowed by the United Auto Workers strike against American Axle, GM’s Arlington plant has continued to feed the market with Suburbans, Tahoes, Yukon XLs, Yukons and Cadillac Escalades.


GM recently announced that it would divert some axles from Arlington to pickup truck plants in Oshawa, Ont., and Fort Wayne, Ind., plants that have not produced a pickup since being idled by the American Axle strike on Feb. 29.



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