GM to cut whole shifts

Rick Wagoner, chairman and CEO of General Motors, speaks at the North American International Auto Show in Detroit in January.

DETROIT — General Motors Corp. will furlough entire shifts of workers at some truck factories and might move them to nearby car plants as it restructures to adjust to a rapidly changing U.S. market brought on by $4-per-gallon gasoline.

GM Chairman and Chief Executive Rick Wagoner and top managers are finalizing additional restructuring moves and likely will announce details at the automaker's annual meeting on Tuesday in Wilmington, Del., two people familiar with the plan told The Associated Press. The people requested anonymity because the plan is not finished.

Key to the plan are the 19,000 hourly workers who signed up to leave the company by July 1 through buyout and early retirement offers. GM on Thursday announced the number of takers in the latest round of offers, which amounts to a quarter of the company's U.S. hourly work force.

The world's largest automaker expects to replace some of the workers at a new entry level wage of about $14 per hour, about half the rate of current production workers. The new wage rate for up to 16,000 nonassembly workers is part of the national contract negotiated with the United Auto Workers last year.

"This attrition program gives us an opportunity to restructure our U.S. work force through the entry-level wage and benefit structure for new hourly employees," GM North America President Troy Clarke said in a statement Thursday.

Already GM has announced that it will accelerate indefinite layoffs of one shift each at the Pontiac and Flint pickup truck assembly plants. The layoffs were to begin July 14 because of slow sales of the plants' products, the Chevrolet Silverado and GMC Sierra.

Workers laid off at those plants could be moved to a car assembly factory in nearby Orion Township, where GM is negotiating with the UAW to add a third shift, said Mike Dunn, bargaining chairman of UAW Local 5960 at the Orion plant.

The Orion plant near Pontiac makes the Chevrolet Malibu and Pontiac G6 midsize cars, both of which are selling well as consumers shift from trucks and sport utility vehicles to smaller cars and crossovers. Malibu sales were up 37 percent in the first four months of this year, while G6 sales were up 22 percent.

Dunn said the additional shift could bring 1,100 jobs to the plant, which currently has 2,780 hourly workers on two shifts.

"We haven't got anything final," he said. "We're always looking to bring work in. We're hoping before the year's out that we can accomplish this goal."

It was unclear Thursday if any other pickup truck or SUV factories would be targeted to lose shifts. GM spokesman Tom Wilkinson would not comment.

But the automaker might add a third shift to its Lordstown, Ohio, assembly plant, where it makes the Chevrolet Cobalt and Pontiac G5 small cars, another person familiar with GM's production plans said Thursday. UAW Local 1112 at the Lordstown plant reached a tentative local contract agreement with GM Wednesday. The deal could clear the way for the third shift.

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Cobalt sales were up 17 percent through April, while G5 sales were down slightly. Silverado pickup sales were down 21 percent in first four months of the year.

Lehman Brothers auto analyst Brian Johnson predicted GM will have to cut North American production by 16 percent this year because of weak sales of trucks and SUVs. GM still had a 125-day supply of pickups and a 139-day supply of SUVs at the end of April, Johnson said. A 60-day supply is considered ideal in the industry.

"GM's inventories of large trucks have grown to worrying levels, and we expect GM to plan large production cuts over the remainder of the year," he wrote Thursday in a note to investors.

GM offered buyouts to all 74,000 of its U.S. hourly workers in February. The company never said how many it hoped would leave.

Under the program, retirement-eligible workers were offered financial incentives to retire with full pension and benefits, while workers who were within four years of their 30th anniversary with GM were allowed to retire early and get reduced pay until their benefits kicked in. Workers could also take up to $140,000 to leave the company with no ties.