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GM to lay off 2,000 workers at car plants in Ohio and Michigan as sales slow

GM to lay off 2,000 workers at car plants in Ohio and Michigan as sales slow
A Chevy Cobalt moves on the assembly line at the Lordstown Assembly Plant in Ohio. (Ron Schwane / Associated Press)

Shifting demand from cars to trucks and SUVs is forcing General Motors to lay off more than 2,000 workers indefinitely at two assembly plants in Ohio and Michigan starting in January.

The company said Wednesday that it will suspend the third shifts at factories in Lordstown, Ohio, and in Lansing, Mich., because of the market change, which is growing and shows no sign of abating.

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About 1,250 workers will be furloughed at the Lordstown plant, which makes the Chevrolet Cruze compact car, starting Jan. 23. An additional 840 will be idled at the Lansing Grand River factory, which makes the Chevrolet Camaro muscle car and the Cadillac ATS and CTS luxury cars, when their shifts end Jan. 16.

“It’s supply and demand, and right now, the demand is not there for what we have,” said Glenn Johnson, president of a United Auto Workers union local at the Lordstown plant east of Cleveland.

Last month, 61.6% of new U.S. vehicle sales were trucks and SUVs, according to Autodata Corp. That's a record likely to be broken, said Jeff Schuster, senior vice president for forecasting at the consulting firm LMC Automotive.

Because of the shift, it's likely that the GM layoffs won't be the last at auto factories that build only cars in the slowing compact, subcompact and midsize segments, Schuster said. "It's not inevitable, but the likelihood is certainly higher," he said.

Americans have been moving away from cars toward trucks and SUVs for several years now as gasoline prices have dropped to near $2 per gallon and the larger vehicles have become more efficient. Baby boomers and young people are attracted to smaller SUVs because of their cargo-carrying ability, high seating position and visibility.

Sales of the Ohio-manufactured Cruze are down nearly 20% this year even though a new version is only in its second year of production. Of the vehicles made in Lansing, ATS and CTS sales each are down about 17% this year, while Camaro sales are off 9%.

The GM layoffs are not the first this year for the U.S. auto industry, which has experienced healthy year-over-year growth since 2009. But sales are starting to slow from the record of 17.5 million set last year.

"This isn't just a GM issue," he said. "The whole small car industry is suffering with the shift."

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