Business

Slump in mid-sized car sales lengthens summer down time at GM Fairfax plant

AP

About 2,800 members of United Auto Workers Local 31 will be getting a longer summer break than usual at the General Motors Fairfax Assembly Plant.

The Kansas City, Kansas, factory will shut down production for a total of five weeks in June, July and August instead of the usual two-week summer hiatus.

Fairfax builds the Chevrolet Malibu, a mid-size car. Malibu sales through May were down 30 percent from a year earlier and so the company has a surplus.

GM also indicated that the summer break at its plant in Lordstown, Ohio, which produces the Chevrolet Cruze compact, might extend longer, but no details were provided. Cruze sales are up this year, Vicky Hale, president of UAW Local 31, said the Malibu sales slump is reflected throughout the car industry.

“The market is for trucks, crossovers and SUVs, but we build mid-sized Malibus,” Hale said. “It’s not a good place for us to be to have just the one product. Most plants have two or three products.”

Ford Motor Co. also has announced some production slowdowns, but its truck sales remain strong. The Ford Claycomo Plant in Kansas City builds the popular F-150 pickup series.

Industry sources said GM’s overall inventory was 44 percent higher in May 2017 than May 2016. WardsAuto.com estimated that GM has about 1 million vehicles on dealers’ lots.

Hale said the Fairfax plant will be down the last week of June and the first week of July and then down again for three weeks in August, adding one week to the previously expected two weeks.

Through the union’s collective bargaining agreements, workers get about 80 percent of their usual take-home pay when on the temporary layoffs. The benefits come from the Kansas unemployment system and General Motors.

Hale said the announced down time plus weeks already idled total 11 weeks this year.

Malibu sales had risen in 2016 for the model’s best sales year since 1980, but this year’s drop is making Fairfax workers nervous, Hale said.

A report published Wednesday by the Wall Street Journal suggested that job cuts will follow if the summer production shutdowns don’t solve the inventory oversupply.

Diane Stafford: 816-234-4359, @kcstarstafford

  Comments