GM Ending Shift At Ohio Small-Car Factory; More Cuts To Come

General Motors Corp. (GM) will eliminate a shift at a once-booming small-car factory in Lordstown, Ohio, this spring, a local union leader said Friday, signaling the auto maker's struggle to match production with sinking demand and fast-changing consumer tastes.

The reduction in Lordstown is part of broader production cuts GM plans to announce as soon as Monday, sources familiar with the plans said Friday. The factory, where GM builds the compact Chevrolet Cobalt and Pontiac G5 will go down to a single shift starting in April, said Dave Green, president of United Auto Workers Local 1714 in Lordstown.

Just this summer the factory was a rare bright spot for GM, running three shifts as the auto maker and its rivals raced to meet demand for small cars at a time when gas cost $4 a gallon. But GM canceled the third shift in December and, like most of the auto maker's U.S. factories, the plant was idled this month.

Along with a U.S. market running at per-capita lows unseen since World War II, volatile gas prices are hampering auto maker's ability to predict customer tastes. When fuel prices soared this summer, Detroit's auto makers and their foreign rivals raced to bolster small-car production and slash output. Now, with gas price around $2, demand for small cars cooled and many buyers are returning to the pickup truck and sport-utility vehicle market.

GM, struggling to survive with help from a $13.4 billion federal loan, must convince the government it can become viable or risk losing the money. Production cuts will be a significant part of GM's recovery plan. After slashing North American production by nearly 20%, or 800,000 cars and trucks, last year, is still building too many cars and trucks in a depressed U.S. auto market.

U.S. sales fell 18% in 2008 to 13.2 million car and truck sales, with many in the industry predicting they will fall as low as 10 million this year.

GM shares recently rose 17 cents, or 5.1%, to $3.49.

-By John Stoll, The Wall Street Journal; 248-204-5533

-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; [e-mail].

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