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News
GM to idle 12 plants
January 4, 2001: 5:39 p.m. ET

Temporary shutdowns of one-to-three weeks as GM moves to cut inventories
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NEW YORK (CNNfn) - General Motors Corp. announced the latest cutback in auto production this month, as it said it announced plans to temporarily idle a dozen plants beginning next week.

GM, Ford Motor Co. (F: Research, Estimates) and the Chrysler Group of DaimlerChrysler (DCX: Research, Estimates) all announced large drops in December sales Wednesday, while predicting sales will remain sluggish for at least the next three-to-six months.

Ford and Chrysler already have announced widespread idling of North American plants for much of this month in order to hold down growing inventories. But GM officials said Wednesday only that they believe its inventory of about 1.3 million vehicles is greater than desired, and that they will monitor sales and production levels carefully.

On Thursday a GM spokesman confirmed that the inventories and sales projections were responsible for most, but not all, of the temporary shutdowns, which will idle nearly 20,000 workers.

graphic"Because of high inventory levels, decreased consumer confidence, we've decided to reduce production to bring our production levels in line with market demand," said GM spokesman Tom Wickham, who added that no permanent plant closures or job cuts beyond those announced in November are planned at this time.

GM and Ford officials predicted industry-wide U.S. sales in 2001 in the 16 million-to-16.5 million range, down from the record 17.4 million cars and light trucks sold last year. The sales projections prompted Rod Lache, auto analyst for Deutsche Bank Alex. Brown, to lower his earnings estimates for GM and Ford Thursday; Lache dropped his estimate for GM to $5 a share from $5.50, and for Ford to $2.72 from $2.92. The First Call forecasts before Lache's downgrade were for GM to earn $5.52 a share this year and for Ford to earn $2.84 a share.

GM said it will temporarily close the three car plants next week: The one in Ste. Therese, Ontario, which makes the Chevrolet Camaro and Pontiac Firebird, will be shut the weeks of Jan 8 and 15; the Orion Township, Mich., plant that makes Buick LeSabre, the Park Avenue and Pontiac Bonneville and Oldsmobile Auro, which will be shut the weeks of Jan. 8, 22 and 29; and Wilmington, Del., which makes the Saturn L series, will be shut the week of Jan 8.

In addition, four light truck plants will be shut next week: The Linden, N.J., facility, which makes the S-10 pickup, will be closed for only one week, as will the Doraville, Ga., plant that makes the mid-size vans. The Shreveport, La., plant, which also makes the S-10 pickups, will be shut the weeks of Jan. 8 and 15 as will the Wentzville, Mo., plant that makes full-size pickups.

Temporary closures are planned for three other car plants later this month, including the Lordstown, Ohio, plant, which makes the Chevy Cavalier and Pontiac Sunfire. That plant will be closed the week of Jan. 29. The Oshawa 2 plant in Ontario, which makes the Buick Century and Regal and the Chevy Lumina, will be closed the weeks of Jan. 22 and 29, as will the Oklahoma City plant that makes the Chevy Malibu.

Also, the Moraine, Ohio, sport/utility vehicle plant and the Fairfax, Kan., car plant will be shut down for product changeovers, with Fairfax down next week and Moraine down both next week and the week of Jan. 15.

Shares of GM (GM: Research, Estimates) gained following the early afternoon announcement, as many investors would prefer temporary shutdowns to increased incentives as a way of cutting inventories. Shares closed up $2.31, or 4 percent, to $57.13. graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.