The U.S. auto industry is one big disaster. Few people are out shopping for new cars and many that are find it hard to get financing. Many people are buying late model used cars coming off lease. This is actually the smart way to buy cars since someone else ate the huge first year depreciation on the vehicle. In my book: "The Financial Physician: How To Cure Your Money Problems and Boost Your Financial Health" (coming to bookstores nationwide this fall), I have dedicated a whole chapter on the right way buy and finance a car. I will put exerpts from that chapter on this blog in the near future, stay tuned.-LouGM Planning To Close Most U.S. Factories For Up To Nine Weeks
General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, three people briefed on the plan said Wednesday. Analysts say the company could be seeing sales decline because of talk about a potential bankruptcy.
The exact dates of the closures are not known, but the people said they will occur around the normal two-week shutdown in July when changes are made from one model year to the next. None of the people wanted to be identified because workers have not yet been told of the shutdowns.
GM spokesman Chris Lee would not comment other than to say the company notifies employees before making any production cuts public.
One of the people briefed on the plan said details are still being worked out. Some of the closings could be staggered between mid-May and the end of July, but the exact number of plants to be idled has not yet been determined.
Another person said a few plants that make more popular models could remain open for part of the shutdown period, but at reduced assembly line speeds.
Thousands of workers could be laid off but would still get most of their pay because their United Auto Workers union contract requires the company to make up much of the difference between state unemployment benefits and their wages. UAW officials at several factories said they have meetings scheduled Thursday and Friday with plant managers and GM human resource officials to discuss production changes.
The shutdown could be catastrophic to many auto parts suppliers that already are near bankruptcy due to previous production cuts. During the shutdown, suppliers couldn't ship parts to GM and would lose critical revenue.
"It's one of those things we've been dreading for a long time," said Jim Gillette, director of financial services at auto-industry consultant CSM Worldwide in Grand Rapids. "It's as bad as its ever been."
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