Photo:
aaron josefczyk/Reuters
General Motors
Co.
will lay off up to 1,500 workers from a small-car factory in Ohio, the latest symptom of sluggish U.S. demand for cars amid the rising popularity of sport-utility vehicles.
GM said Friday it would eliminate one of the two shifts at its Lordstown, Ohio, plant, where workers assemble the Chevrolet Cruze compact sedan. The company cited “lower customer demand” for smaller cars.
“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,” the auto maker said in a statement.
GM and other auto makers are scrambling to cut car production and adjust their model mix as consumers gravitate toward SUVs and pickup trucks amid low fuel prices. That trend has been playing out for a few years, though auto executives have said they’ve been surprised at the speed of the shift.
GM and
Ford Motor
Co.
, for example, plan to cut some models and are considering eliminating others as a response to the market changes, people familiar with the matter have said.
The drop in sales of passenger cars comes despite continued strength in the overall U.S. auto market. Sales grew for a seven straight years from 2009 until slipping nearly 2% last year, though they remain on pace for around 17 million vehicle sales this year, a historically strong level.
GM last year laid off thousands of workers from once-busy factories making cars that have been waning in popularity. The layoffs at Lordstown, set for June, are the auto maker’s first significant job cuts this year.
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