General Motors has started to cut hundreds of job at its Lordstown, Ohio plant as the carmaker makes adjustments to much slower demands for new vehicles. The auto plant, which has slightly less than 3,000 workers, builds just the company’s Chevy Cruze.
On Friday afternoon, leaders at the plant told workers that the facility would be slowing down its assembly lines through eliminating one of its two shifts beginning the middle of June.
General Motors told the media that as many as 1,500 of its workers could be effected, though what the exact number is, is still not known and will not be for the next couple of weeks.
The move does not come as any surprise given the demand for sedans has dropped tremendously, especially across the U.S.
In 2018, sales of cars are down over 13.2% while sales for SUVs, crossovers and pickups are up by 7%. For its Chevy Cruze, GM said the drop it has experienced in sales has been much more severe.
In 2018 alone, sales of Cruze have dropped 28% shows date released by Autodata the auto research company. In 2017, General Motors sold slightly more than 184,000 Cruze models across the U.S., which was 32% down from only four years ago when sales topped out for the car at 273,000 units.
The steady drop prompted the automaker in 2017 to move from running its assembly lines 24 hours per day at its Lordstown plant to just two shifts per day.
The latest cut in production comes as the most recent data released shows that demand for utility vehicles has accelerated. IHS Markit, the auto consulting company says that loyalty amongst crossover and SUV owners reached a new all-time high in 2017, as more than 66.9% of households in the U.S. with a crossover or SUV who returned to buying, purchased another SUV or crossover.
The number of different vehicles that are available in the utility vehicle lineups of automakers whether based upon size, technology or prices, now rivals choice amongst sedans and is continuing to increase, said a spokesperson from HIS Market.
Over the last few years until late in 2017, automakers were enjoying a strong and robust sales period dating back to the end of the financial crisis.