General Motors Shortens Work Stoppage At Mexico Factory
10 Juli 2009 - 8:00PM
Dow Jones News
General Motors Co. plans to shorten a summer shutdown at its
factory in the city of San Luis Potosi to five weeks from seven
thanks to better-than-expected demand, a company official said
Friday.
The plant, which produces the compact Chevrolet Aveo and Pontiac
G3 and has been idle since the beginning of this month, will resume
operations Aug. 10, said Mauricio Kuri, head of communications for
General Motors de Mexico, in a press conference.
"This is good news," Kuri said. "Conditions have improved for
the orders placed at San Luis Potosi."
Kuri also said that GM's pickup truck factory in the city of
Silao in central Mexico will resume operations Monday after an
eight-week work stoppage that began in May.
He said the recently passed "Cash for Clunkers" legislation in
the U.S. - which gives car buyers up to $4,500 to trade in aged
gas-guzzlers for new cars and trucks - could boost exports from
GM's factories in Mexico.
GM de Mexico's inventories are "very healthy," as the company
has a 45-day supply of vehicles on hand, Kuri added.
Speaking at the same event, GM de Mexico President Grace
Lieblein said the auto maker plans to reduce its non-unionized work
force by around 300 people in coming weeks.
"As in the U.S., we need to reduce employment," she said, adding
that the company will have roughly 3,000 non-unionized workers
after the job cuts.
Kuri said GM de Mexico employs a total of about 12,000
people.
Mexico's auto industry has been devastated this year by a plunge
in new vehicle demand in the U.S., which is mired in a deep
recession. Mexico's auto production from January to May fell 42% on
the year to 500,383 vehicles, while exports sank 41% to
399,755.
There are early signs that demand could turn around in coming
months, however, as U.S. new-car sales in June fell by 28%, their
smallest drop this year.
Officials at GM de Mexico, which produced 39% fewer cars in the
first five months of 2009 than in the year-ago period, have said
they expect output to improve in the second half of the year.
Lieblein said GM de Mexico currently has no more work stoppages
scheduled at its factories this year.
The Mexican Automotive Industry Association, or AMIA, is
scheduled to release June's production, sales and export data
Monday.
-By Paul Kiernan, Dow Jones Newswires; (5255) 5001-5726,
paul.kiernan@dowjones.com