GM Shrinks Large Truck, SUV Segments, Will Cut 3,500 Jobs

General Motors Corp., citing rising gas prices and a slowing economy, said on Monday it will cut back its production of large trucks and sport-utility vehicles at several plants, resulting in about 3,500 hourly employee job cuts.

The Detroit-based automaker says it will reduce production at several plants in 2008, resulting in cutbacks of 88,000 full-sized pickups and 50,000 full-size SUV's from the company's North American operations.

Preliminary forecasts, which could vary slightly, indicate GM expects to cut 750 jobs in Janesville, Wisconsin; 750 in Flint, Michigan; 900 in Oshawa, Ontario; and 1,150 in Pontiac, according to GM spokesman Chris Lee.

The cuts will take place on July 14 at the plants in Flint, Janesville and Pontiac and September 8 in Oshawa.

With rising fuel prices, a softening economy, and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities, said Troy Clarke, president GM North America in a statement.

Sales of full-size pickup trucks and SUVs, have declined 15 percent and 26 percent respectively in the first quarter of 2008, GM said.

The Detroit-based company is a market share leader in both segments, with a 40 share of full-size trucks and more than a 63 percent share of the full-size SUV category.

This is a difficult move, but we remain committed to retaining and growing our leadership position in the full-size truck market, Clarke added.

Among the affected brands are Chevrolet Silverado, Chevrolet Tahoe, GMC Sierra and GMC Yukon.

Clarke says the market is shifting toward cars and crossovers. GM says it is seeing strong sales of Chevrolet Malibu, Cadillac CTS, Chevrolet Cobalt, Pontiac G6, Chevrolet Impala, Buick Enclave and GMC Acadia.

He added that the company is considering increasing production in those categories but there are no changes car production plans at this time.

The Detroit-based automaker will eliminate one shift of production at its truck plants in Pontiac Flint, and Oshawa, and its full-size SUV plant in Janesville.

The details of the cuts will be worked out with the United Auto Workers union and Canada Auto Workers union. All union workers at General Motors have already been offered buyout or retirement plans, as the company seeks to reduce its costs.