Citing unnamed sources, The Wall Street Journal reported this morning that General Motors Co. (NYSE: GM) will temporarily close its Detroit-Hamtramck assembly plant for the final six weeks of the year as the company tries to winnow its supply of low-selling passenger cars.
The closure will result in layoffs of about 1,500 workers at the plant, virtually all of its hourly employees. The worse news, according to the Wall Street Journal, is that production is expected to be cut by 20% once the plant reopens in January, a move that will permanently cost 200 workers their jobs.
GM builds four passenger car models at the Detroit-Hamtramck plant: the Buick LaCrosse, the Cadillac CT6, the Chevy Volt and the Chevy Impala. One look at the year-to-date sales of these cars is a good indicator of why GM is slowing production.
For the first nine months of 2017, GM has sold 15,634 Buick LaCrosse passenger cars, a drop of 21.2% year over year. In September, sales were down 42.4% to just 1,100 units.
Sales of the Cadillac CT6 totaled 8,128, an increase of nearly 51% year over year, but September sales were down 26.7%, indicating that inventory levels are sufficient to meet demand for the rest of the year.
The hybrid electric Chevy Volt has sold 15,348 units in the first nine months of the year, down 6% year over year. September sales fell 28.5% to 1,453. The all electric Chevy Bolt, which began making its appearance in dealer showrooms in January, has sold 14,302 units for the year to date and sold 2,632 in September.
The venerable Chevy Impala has seen sales drop 31.5% so far in 2017 to 50,743 units. September sales rose 0.4% to 6,947, but full-size passenger cars have been slow sellers for all automakers while sales of sport utility vehicles, crossovers and light trucks continue booming.
GM did not comment on the report.
GM stock traded down about 1.8% at $44.66 Thursday morning. The stock’s 52-week range is $30.21 to $45.59, and the 12-month consensus price target is $41.68.