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GM’s Ohio plant to face 1,500 layoffs

Sheetal Sukhija - Monday 16th April, 2018

OHIO, U.S. - In a bid to deal with falling demand for small cars, General Motors has announced that it will be cutting as many as 1,500 jobs.

All the jobs will be affected at the company’s massive Lordstown, Ohio, assembly plant, which will affect the number of work shifts at the factory.

According to reports, between 2014 and 2017, sales of Chevrolet Cruze slid over 30 percent. 

It is the lack of demand for the Chevrolet Cruze, the small car that GM builds at the plant that is being cited as the reason for the layoffs.

Further, sales of the Cruze are said to have dropped as the market shifted strongly away from small cars to SUVs. 

Adding to its woes, Cruze sales plunged another 26 percent in the first three months of this year.

GM is also simultaneously working on building a hatchback version of the Cruze.

This, however, is being built at a plant in Mexico since the Lordstown plant builds only a sedan version. 

Currently, the hatchback accounts for less than 20 percent of the company’s U.S. sales of the Cruze.

GM’s latest announcement of job cuts meanwhile is set to eliminate half of the current jobs at the plant.

According to the company’s announcement, senior workers will be offered a buyout package to try to reduce the need for involuntary layoffs, scheduled for June. 

Some of the affected employees are likely to be able to fill openings at other GM plants.

In January 2017, GM eliminated the third shift at the plant and yet, the falling demand for the Cruze meant that the plant had to be shutdown for weeks at a time because the remaining two shifts were more than needed to fill demand.

In a statement, GM said, "As we look at the market for compact cars in 2018 and beyond, we believe a more stable operating approach to match market demand is a one-shift schedule.”

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