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GM confirms extended factory shutdowns
Automaker warns that Delphi troubles could force 'an uncontrolled shutdown'
General Motors Corp. confirmed this afternoon that it is planning extended shutdowns this summer at its North American assembly, stamping and powertrain factories — a move that will cut about 190,000 vehicles from its North American production schedule in an effort to reduce swelling dealer inventories.

The shutdown, which first leaked out to the public late Wednesday, will allow GM to bring production in line with the current market demand. Through March, GM’s sales in the United States were down 48.8%.

GM also said the decision was made as the company considers “the possible production implications of the complicated and difficult negotiations with Delphi and its debtor in possession lenders.”

Delphi has been in bankruptcy since 2005, and GM said that Delphi’s lenders have rejected a GM proposal that, according to the automaker, would allow for a successful and rapid resolution of the supplier’s bankruptcy case.

“Without the successful resolution of this dispute, it is General Motors' view that Delphi or its lenders could force GM into an uncontrolled shutdown, with severe negative consequences for the U.S. automotive industry,” GM said in a statement.

Delphi had faced a Friday deadline to submit a deal with GM to come out of bankruptcy.

But a U.S. Bankruptcy court judge today agreed to give the parties until May 4 to submit a deal. If a deal is not reached, Delphi's lenders could call their bankruptcy loans to the supplier by May 9, a move that would force Delphi into liquidation.

Delphi's lenders could have pulled their loans as early as Saturday.

Meanwhile, GM said it will temporarily shut down 13 assembly plants in North America and corresponding stamping and powertrain facilities.

The scheduling changes won’t impact factories in the process of launching new vehicles, including the Oshawa plant that builds the Chevrolet Camaro and the Fairfax, Kan., plant that builds the Buick LaCrosse.

"We're taking aggressive steps to accelerate our inventory initiatives that have worked well since the first of the year. While sales have been performing at or close to our plan estimates, and dealer inventories have been reduced accordingly, we want to more closely align inventories with even more conservative market assumptions," said Troy Clarke, GM North America president, in a statement. "By reducing our inventories even more aggressively we reduce pressure on GM and our dealers, and set ourselves up well for a clean 2010 model year start-up."

U.S. and Canadian assembly plants are still slated for the traditional summer shutdown during the weeks of June 29 and July 6, except at Lansing Delta Township, which will be up both weeks, and Fairfax, which will be up the week of July 6.

The down weeks for GM factories will be staggered and for varying time periods based on inventory levels and expected demands, the company said. Some facilities are down for as many as eight or nine weeks while others are down for much shorter periods.
http://www.freep.com/article/20090423/BUSINESS01/90423062/GM+confirms+extended+factory+shutdowns