GM to temporarily close 20 plants to slash output

NEW YORK (AP) — General Motors Corp. said Friday it will temporarily close 20 factories across North America and make sweeping cuts to its vehicle production as it tries to adjust to dramatically weaker automobile demand.

GM said it will cut 250,000 vehicles from its production schedule for the first quarter of 2009, which includes a cut of 60,000 vehicles announced last week. Normal production would be around 750,000 cars and trucks for the quarter, spokesman Tony Sapienza said.

Many plants will be shut down for the whole month of January, he said, and all told, the factories will be closed for 30 percent of the quarter.

"We're adjusting pretty dramatically," spokesman Chris Lee said.

The move affects most of GM's plants in the U.S., Canada and Mexico. During the shutdowns, employees will be temporarily laid off and can apply to receive a portion of their normal pay from the company. They can also apply for state unemployment benefits, Lee said.

GM and nearly all automakers who sell in the U.S. are mired in the worst sales slump in 26 years. GM reported its sales in the U.S. plunged 41 percent in November and are down 22 percent for the first 11 months of the year compared with the same period last year.

Cash-strapped GM is seeking government loans to stay in operation beyond the end of the year. The White House said Friday it may tap into its $700 billion Wall Street bailout fund to help GM and Chrysler stay in business after the Senate blocked a measure to provide $14 billion in immediate loans.

The measure failed in dramatic fashion late Thursday after Senate Republicans balked at passing the bill without more wage and benefit concessions from autoworkers.

Lee said Friday's production cuts are unrelated to the rescue's failure and had already been planned.

This comes on the heels of the Dec. 5 GM announcement of 2,000 layoffs, including 890 at its Lordstown complex. At the time, the company warned it was not done cutting costs as the economy worsens.