GM may detail plant closures Monday

Wagoner will announce plans to close 4 assembly plants and trim 25,000 posts, Automotive News says.

November 21, 2005: 6:25 AM EST


FRANKFURT, Germany (Reuters) - General Motors Corp Chief Executive Rick Wagoner will soon announce plans to close four U.S. assembly plants, the Automotive News industry paper reported Monday, citing a "company insider."

It said the move was part of an effort by the world's biggest carmaker to quiet Wall Street speculation about a possible bankruptcy.

The paper quoted its source as saying the planned cutbacks would come in a "bold announcement" that should "cause a lot of people to shut up."

GM (Research) was not immediately available for comment, but said it will have an announcement for employees and news media at 8:30 a.m. ET. It has lost nearly $4 billion this year and has said it will give details by the end of 2005 of its plan to cut at least 25,000 manufacturing jobs as part of a broader restructuring plan.

"This is all rolling out to the original schedule," the company insider was quoted as saying. "It's carefully coordinated with the UAW (trade union) and other constituencies to avoid blowing the place up."

The paper said it was not clear how many jobs will be eliminated or which plants would close. The shutdowns will not affect GM's future product plans, it added.

Wagoner has committed to a series of plant closures and the elimination of nearly a quarter of GM's U.S. factory work force through 2008.

GM has been grappling with high health-care and commodities costs, loss of U.S. market share to foreign rivals and slumping sales of high-margin sport utility vehicles whose popularity has dwindled of late due to high fuel prices.

Wagoner said in June the proposed cuts would save the automaker $2.5 billion a year. But analysts worry about expenses associated with the cost cuts, and some estimates predict that early retirement and employee relocation costs could total up to $2 billion.

Wagoner has said he plans to cut manufacturing capacity to match demand by 2008. Some experts believe The Lansing Craft Center, where GM builds the Chevrolet SSR, will likely be shut down because the convertible sport pickup has not sold very well and GM has idled the plant for several months in 2005.

Two other plants likely to be shut down are the Doraville, Ga., plant, which builds GM's minivans, and an SUV plant in Janesville, Wis., analysts said.

The new plant closures will add to three assembly plants that GM has already closed or stopped production at this year -- a car plant in Lansing, Mich., an SUV plant in Linden, N.J., and a van plant in Baltimore.