General Motors Corp. announced plans late Monday to cut an entire shift at four of its North American assembly plants — including one in Oshawa, Ont. — as the rising price of gas cuts into sales of trucks and SUVs.
GM said the factories that make pickup trucks in Oshawa, Pontiac, Mich., and Flint, Mich., as well as the full-size SUV plant in Janesville, Wis., will each have one shift cut.
About 3,500 workers could be affected in total by the shift reductions, with about 970 affected in Oshawa, GM said. But the company said the exact number of layoffs would be worked out "over the next several weeks" in meetings with the UAW and CAW unions. In Canada, laid-off workers could get 80 per cent of their normal pay with top-ups to EI payments.
GM's Oshawa truck plant makes the Chevrolet Silverado and the GMC Sierra. The cuts at that plant take effect Sept. 8. The other plants lose a shift in July.
GM said idling one shift at four plants will result in a drop in production of 138,000 vehicles this calendar year — 88,000 fewer light trucks and 50,000 fewer SUVs.
“With rising fuel prices, a softening economy, and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities,” said Troy Clarke, president of GM North America, in a release.
U.S. sales of GM trucks were down 15 per cent in the first three months of the year. In March, its truck sales in both the U.S. and Canada plunged 22 per cent. Gasoline prices hit a record $3.60 US a gallon on Monday, according to the U.S. Energy Information Administration. Pump prices in Canada are very close to record highs.
Many GM plants have already been hit by layoffs this year as a result of a two-month strike at American Axle — a major parts supplier.
With files from the Associated Press
