GM to Lay Off 1,600, Plans to Close More Auto Plants

DETROIT — General Motors Corp.’s Linden, N.J., assembly plant will cut production in half in February, putting 1,600 workers on indefinite layoffs, the auto maker said Thursday, providing further evidence of tough times in the auto industry.

GM and Chrysler Corp. also announced that additional plants will be closed for short periods in January as auto makers grapple with high inventories during a period of low demand.

The announcements Thursday, coupled with those earlier this month, bring the number of affected workers to more than 127,000.

The shutdowns bring to 42 the number of assembly plants that will be down for at least one week in January. The Big Three operate 53 assembly plants in the United States.

In addition to state unemployment benefits, laid-off workers can draw on special funds that can boost their pay during factory shutdowns to as much as 95% of their straight-time wages.

The effect of the shutdowns on auto industry suppliers is difficult to measure, but it is likely that thousands of other workers could face temporary layoffs next month.

Ford Motor Co. said Thursday that it had no additional temporary January shutdowns to add to those announced Monday at 11 of its 16 assembly plants.

Each of the Big Three has said that slumping demand and rising inventories are the reasons that plants are being shut down. While the Big Three close their plants, U.S. assembly plants operated by Japanese companies continue at full production.

GM spokesman Phil Workman said Thursday that the second shift at the auto maker’s Linden plant, which makes Chevrolet Corsica and Beretta cars, will be eliminated Feb. 26. Corsica and Beretta cars also are made in Wilmington, Del.

“It’s to balance inventory with anticipated demand,” Workman said of the shift elimination.

Demand for Corsica and Beretta cars has been slipping. Sales this year through Dec. 10 were 12.7% behind last year’s pace. GM’s domestic car sales, meantime, were off 8.3% for the same time.

Combined inventory of the two cars--which are essentially the same except that Beretta has two doors and Corsica has four--stood at 123 days at the end of November, based on the current selling pace, according to Ward’s Automotive Reports, a weekly industry newsletter.