Mar 21, 2011
GM lays off 59 at N.Y. engine plant due to Japan disaster
General Motors today stopped production at the Tonawanda plant in Buffalo that makes engines for the Chevrolet Colorado and GMC Canyon pickups. Assembly of the pickups was halted last week in Shreveport, La., because of a parts shortage.
GM says it doesn't know when work will resume at either plant. GM spokeswoman Kim Carpenter told the Associated Press that the layoff affects 59 of the 623 workers at the Tonawanda plant.
The shutdown is the latest sign that the problems in Japan can extend beyond Japanese automakers because of parts suppliers. Also last week, GM Europe said it is slowing production of some Opel products and closing a plant in Spain to conserve parts.
GM has declined to say what Japanese parts it is missing for the pickups. Conspiracy theorists believe GM may be diverting the parts it has to the most profitable vehicles that use them:
Jim Gillette, a supplier analyst at IHS Automotive, told that AP that GM may have enough parts but is choosing to use them for vehicles that are more popular and more profitable. The Colorado compact, for example, starts at $17,000, and GM sold 2,600 in February. But the Chevy Silverado big pickup starts at nearly $4,000 more, and GM sold 31,728 in February.
Gillette said one reason that scenario is likely is that GM shut its plants so soon. Unless it was flying the Japanese parts into Shreveport, it should have had several weeks' worth of supplies on hand or en route by ship. Ford and Chrysler have yet to shut down any plants, even though they also use Japanese parts.
"When this will really hit North America is three or four weeks from now, when those ships have come to port and all the parts are on the vehicles but no more ships are on the way," Gillette said.
Spokeswoman Carpenter wouldn't comment on that speculation. But in a statement last week, GM said it planned to "supply the most critical operations."
