GM Laying Off About 1,000 Workers Amid Downturn in Passenger-Car Sales

By Mike Colias 

General Motors Co. will eliminate a shift at a sedan plant in Kansas City, Kan., laying off about 1,000 people as the nation's largest auto maker continues to shed thousands of factory jobs amid a sharp downturn in demand for passenger cars.

GM on Friday notified workers that the factory's third shift will be eliminated in late September, the company confirmed in a statement Monday. The Wall Street Journal reported last week that GM was extending the plant's traditional summer shutdown and that permanent job cuts were likely.

"Lower demand for passenger cars across the industry has caused us to adjust production of some models," GM said in a statement. The company said it is launching a "record number" of crossover SUVs to retain customers who are defecting from sedans.

The Kansas City factory makes just one model, the Chevrolet Malibu midsize sedan, a market segment that is shrinking rapidly as consumers flock to crossovers amid tame gas prices and many new entries from auto makers. Malibu sales fell 30% this year through May, while midsize cars over all were down 14%, according to Autodata Corp.

The auto giant's sales are off 1.1% in the U.S. through five months compared with the same period in 2016. Its performance is slightly better than the industry's overall decline of 2% over the same span.

GM over the past seven months has announced plans for more than 5,000 layoffs across a half-dozen U.S. factories in response to slow passenger-car demand. A GM spokesman said the actual number of workers out of a job is smaller because some have been able to transfer to other GM factories, though he couldn't cite a specific number.

Meanwhile, GM is in growth mode at factories that make pickup trucks and SUVs. Last week the auto maker said it would open a large supplier park near its plant in Arlington, Texas, to support its next generation of large SUVs. Employees at GM's three U.S. pickup-truck factories also are working around the clock.

GM executives have said the company will adjust production schedules to avoid overproducing vehicles, a practice that helped nudge the auto maker into bankruptcy in 2009. GM has negotiated more flexible terms from the United Auto Workers union in recent years that make it less expensive to lay off workers than in past market downturns.

Write to Mike Colias at [e-mail]

(END) Dow Jones Newswires

June 19, 2017 14:31 ET (18:31 GMT)

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