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General Motors Forced To Shut Down Plants

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On: Thu, Mar 24, 2011 at 4:01PM | By: Chris Weiss


General Motors Forced To Shut Down Plants

It's no secret that the Japanese auto industry has been reeling from the earthquake that hit the nation more than a week ago. All of Japan's major automakers have been forced to shut down certain operations, and some shut-downs will continue until later this week, if not longer. With a ravaged parts supply chain, damaged power supply network, and disrupted transportation infrastructure, Japan's auto industry may not be completely back on track for months to come.

But Japan's auto industry isn't the only one that's being affected. Automakers here in the States rely on a list of parts from Japanese manufacturers, and are starting to feel the effects. GM has been forced to shut down two plants here in the U.S. and may shut down more before the story is over.

Last week, GM announced a shutdown of its Shreveport, Louisiana factory responsible for building the Chevrolet Colorado and GMC Canyon pickup trucks. The company laid off 800 workers while the plant idles. Shortages in Japanese-sourced parts forced GM into shutting the plant down.

On Monday, another domino in the chain fell: GM shut down some operations at its Tonawanda plant in Buffalo, NY. While that plant is not experiencing parts shortages, it's being affected by the Shreveport shut down. The Buffalo plant builds four- and five-cylinder engines for use in the Shreveport-assembled pickup trucks. So with Shreveport production at a standstill, engine production is not needed. GM will lay off 59 out of 623 Buffalo workers as a result of the shutdown.

The situation at GM is similar to what is happening in Japan. While most Japanese automaker's facilities were outside of the main quake zone, more than a hundred parts manufacturers were located within the most affected part of Japan. With production of parts stopping as a result of earthquake damage, Japan's automakers have been forced to stop and slow production.

So far, GM is the only U.S. automaker affected by the parts shortage, but depending upon how things play out, Ford and Chrysler could also be forced into shutdowns and delays. Both automakers are monitoring the situation closely.




Comments

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Michigander | 11:03AM (Fri, Mar 25, 2011)

When I first heard about the shut-downs in Japan I knew it wouldn't be long until we started feeling the hit State side. Are they giving the employee's any type of payment compensation?



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