General Motors Corp., swamped with excess cars, said Thursday that it will indefinitely lay off about 850 of the 3,200 workers at its Van Nuys assembly plant, effective April 2.
The announcement came one day after GM said it would indefinitely idle 975 workers at its Fairfax plant in Kansas City, Kan., which employs 3,000 and builds the Pontiac Grand Prix. The layoffs, which will occur as both plants cut back to one production shift from two, will be decided by seniority among the workers.
GM also said the two plants, along with several others around the nation, will be shut down completely next week in an effort to trim inventories, idling about 17,300 workers. Workers in Van Nuys, where the sporty Chevrolet Camaro and Pontiac Firebird are built, were told of the impending layoffs Wednesday, said GM spokeswoman Kathy Tanner.
Meanwhile, Ford Motor Co. said it too will temporarily suspend production at four plants in Missouri, Michigan and New Jersey, starting Monday. The move will affect 9,700 hourly workers. The cutbacks are necessary because car and truck sales have tumbled in recent months, leaving car makers with bloated supplies. The economy’s downturn, together with consumers’ fears that the Persian Gulf War will weaken the economy even further, are largely responsible for the slump.
In the Jan. 11-20 period, sales of North American-made cars and light trucks dropped 19.6% from a year earlier, the auto makers said in separate reports Thursday. GM’s sales fell 11.4%, and Ford’s were off 24%. “We’re all depressed about it, but you see the general shape of the economy,” Richard Ruppert, the United Auto Workers’ shop chairman in the Van Nuys plant, said of the temporary layoffs. “People understand that this layoff is different, because it’s shaped by what’s happening in the Middle East.”
But in Van Nuys’ case, the Camaro and Firebird also get much of the blame, because they “are basically nine years old (in design), and are in need of a replacement,” said Chris Cedergren, senior analyst at the research firm J. D. Power & Associates in Agoura Hills.
Auto makers have spent much of the past year temporarily shutting production at various sites in a bid to better match supplies with consumer demand. But the closings have had only a limited effect.
Consider the Van Nuys plant. As of Jan. 10, Pontiac reported a 179-day supply of Firebirds in dealers’ stocks, compared to the 75- or 100-day supply that’s typical for the car’s slow-selling winter season, GM said. Moreover, GM is saddled with that many Firebirds even though it already has kept production at the Van Nuys plant to a minimum through earlier temporary shutdowns. The plant has been open only nine days since Dec. 17.
Asked when the layoffs might end, GM’s Tanner said, “We don’t know at this point. Things will depend on where we are with the Persian Gulf crisis, and the market will dictate what we do with production schedules.”
The idled workers will receive up to 95% of their normal pay during the layoffs, with the help of unemployment pay and other benefits, and the layoff cannot extend past 36 weeks under the current GM-UAW union contract, Tanner said.
GM’s announcement was the latest of several setbacks for the Van Nuys plant, whose future is very much in doubt. GM already has said it plans to shift production of the Camaro and Firebird to Canada when new versions are expected to surface in 1993, but has yet to say whether Van Nuys will get another model to build.
The company has said it might convert Van Nuys into a “flex plant,” which would be capable of building different cars on short notice, depending on demand. Earlier this month, GM President Lloyd Reuss said Van Nuys also is a possible site for production of the company’s proposed Impact electric car. But GM has made no guarantees.
BACKGROUND * General Motors Corp.'s Van Nuys plant, built in 1947, is the last auto factory in Southern California and one of only two in the state. The plant, which builds the Chevrolet Camaro and Pontiac Firebird, has suffered rocky times since the cars’ sales peaked in 1978. GM sold a combined 477,110 Camaros and Firebirds that year, compared to only 116,179 in 1990.