GM to temporarily close 20 plants, slash output

NEW YORK -- 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 all 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 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.

Auto demand in the U.S., and increasingly around the world, has been hobbled due to the declining economy and the credit squeeze. Industrywide vehicle sales fell 37 percent in November.

Lee said GM's production cuts will be achieved by adding "down weeks" to the schedules at the affected plants. During down weeks, which can be staggered during a given period of time or can come several at once, the plant will not produce anything and employees will be temporarily laid off.