General Motors says it will cease production at four factories in Ohio, Wisconsin, Canada and Mexico that produce trucks and SUVs. As General Motors Corp. prepares for its annual shareholders meeting on Tuesday, workers across the country are worried that the next round of the company’s restructuring could cost them jobs or even their factories.
GM may also furlough entire shifts of workers at some truck factories and may move them to car plants as it restructures to adjust to a rapidly changing U.S. market brought on by $4 per gallon gasoline.
With high gas prices, more expensive groceries, the credit crunch and declining home values, fewer people are going to dealer showrooms, Gettelfinger said.
“People are going to stay away from the big-ticket items like automobiles,” he said.
GM sales through April were off 12.2 percent when compared with the same period last year. The company sold 20.8 percent fewer Chevrolet Silverado pickup trucks, and the market for big SUVs has all but collapsed.
GM also lost $3.3 billion in the first quarter and a record $38.7 billion in 2007, largely due to a charge for unused tax credits.
JP Morgan analyst Himanshu Patel said he would not rule out a cut in GM’s 25-cent-per-share dividend, and said in a note to investors Monday the company likely will have to borrow more money.
“GM no doubt needs to raise financing given current cash burn rate — we think as much as $10 billion of total financing may be needed, though not all immediately,” Patel wrote.
Already the company has announced indefinite layoffs of one shift each at the Pontiac and Flint pickup plants, and more are expected.
Last week the company announced that 19,000 of its 74,000 U.S. blue-collar workers had signed up for buyout or early retirement offers. That clears the way to shrink the company’s production footprint, but few know where the cuts will come.
For workers, it could mean being forced to move to another city, away from families and lifelong ties to the community, if their jobs are eliminated or their plant is closed. If they’re lucky, there could be a factory nearby where GM will increase production of cars that get good gas mileage.