General Motors has announced that it will lay off close to 1,500 workers from a plant in Ohio. The move is due to market shifts in consumer demands from compact cars to SUV’s and pickup trucks. The shift is attributable to lower gasoline prices, the auto maker believes.
“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 company said in a statement.
The drop in demand in smaller cars comes despite overall strength in the U.S. auto market. Sales grew for seven straight years from 2009 until last year. In 2017, new-car sales were down 2%, but are still on pace for 17 million new sales this year, a historically high level.
One of two shifts at the company’s Lordstown, Ohio, plant is being eliminated. The company assembles the Chevrolet Cruze compact sedan at the site. Last year, the company laid off thousands of workers from factories that were once humming amid waning demand for particular models.
Auto makers are struggling to keep pace with the shifts in consumer demands and have been surprised at how quickly they’ve taken shape. The layoffs at Lordstown are set for June and are the company first significant cuts this year.
Earlier this year Chrysler announced it would be spending $1 billion to modernize a Michigan plant with the goal of bringing back 2,500 automobile manufacturing jobs to Warren, Michigan, the town where the plant is located. The company said these changes are the result of the tax overhaul that the GOP-led Congress passed in December.
Photo by General Motors via Wikimedia Commons