14 News, The Tri-State's News and Weather Leader-GM to temporarily shut 13 plants, cut production
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Posted by Natalie Yarbor - email
DETROIT (AP) - General Motors Corp. said it will temporarily close 13 assembly plants in the U.S. and Mexico as it tries to control growing inventory due to slumping sales.
The company said in a statement Thursday that the closures will start in May and end in July.
Shutdown weeks vary by factory, but some will be closed for nine weeks.
The company plans to cut production by 190,000 vehicles.
GM said the shutdowns will help control high dealer inventories and bring production in line with sales.
Analysts said the company could be seeing sales decline because of talk about a potential bankruptcy.
Phil Powell of the Indiana University Kelley School of Business said, "This two month shut down could be the straw that breaks the camel's back, in terms of economic confidence. We are just starting to turn the corner and you will have a lot of communities that get this last minute bump. A shut down for two months has a ripple effect that can destroy our psyche. It means people don't spend money. This summer might not be that enjoyable."
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