General Motors Co. (NYSE: GM) announced plans to cut back production by about 20% and shut down their Detroit assembly plant for about six weeks from the middle of November. The automaker also wants to lay off about 1,500 employees as they struggle with a continued decline in sedan sales. The decrease in production will cost about 200 employees their jobs.
This Detroit plant produces four sedan models which include the Chevrolet Impala and the Buick LaCrosse that have not been performing well. Sales of the Impala were down 31.8% with Buick’s sales dropping 21.5% year to date. The company has been struggling most of this year to restrain high inventories of passenger cars as consumers have shifted to purchasing sport utility vehicles and pickup trucks instead.
Earlier this year, General Motors already cut off the Detroit plant’s second shift which lead to 1,200 employees being laid off. Shifts at five of their plants and other facilities have been reduced with plans to cut third shift at their Tennessee plant as well next month. Following this lay off, alternative work was found for the 2,900 hourly workers that were affected but production cuts can help automakers avoid deeper price cuts on cars they can sell. Shares of the company dropped 1.2% at $44.92.