GM workers face more layoffs

Cuts in production have domino effect

Sharon Terlep / The Detroit News

Casualties of deep production cuts under way at General Motors Corp. will mount this summer, as reductions spread from major assembly plants to stamping and Powertrain factories throughout North America.

A GM stamping plant in Grand Rapids is warning employees to expect around 100 layoffs as a result of cuts slated for the second half of the year, one of the first concrete signs of the inevitable residual effects of GM’s downsizing.

"The domino effect is very real," said George Magliano, director of North American auto industry research for Global Insight in New York. "You take a vehicle plant down, and the supplier end of it is going to be affected."

GM, facing mounting losses and a tumbling share price, is moving fast to align its production with diminished demand for big trucks and SUVs.

Over the last few months, the automaker has laid out plans to eliminate shifts, temporarily idle plants, slow line speeds and, by 2010, shutter four North American truck plants.

More than 10,000 hourly jobs are likely to go as a result of the cuts.

The ultimate extent of the fallout is difficult to gauge, Magliano said. Plants capable of providing parts for a variety of vehicles are likely to emerge relatively unscathed.

Shift toward crossovers

As GM works to cull trucks, it’s also working to pump out more fuel-efficient cars and crossovers, giving some factories more work. But plants largely dependent on one truck line will be hit hard, he said.

"If a facility is pigeonholed toward one or two final assembly plants, any changes are going to have a substantial effect," he said.

Officials from the United Auto Workers Local 730, which represents GM’s Grand Rapids metal stamping plant, met Thursday to discuss impending cuts, local union President Greg Golembiewski said.

In an online newsletter to employees, the union said to expect 110 to 120 layoffs from the impact of GM’s broader restructuring.

GM spokesman Tony Sapienza said the automaker hasn’t made final decisions on production changes at parts plants.

"There’s going to be an impact," he said.

GM Chief Executive Rick Wagoner, when he outlined GM’s new restructuring moves earlier this month, said the automaker plans to "consolidate the related stamping and Powertrain capacity" but didn’t specify further.

GM’s U.S. sales are down 17 percent for the year, nearly twice the rate of the overall industry. Many analysts are predicting 2008 auto sales to fall to levels not seen since the mid-1990s.

Richard Kwas, a Wachovia Capital Markets analyst, is predicting GM’s U.S. market share will fall to a historic low when major automakers release their June sales results on Tuesday.