GM closing factories, cutting shifts as sales decline

DETROIT -- General Motors is closing a Michigan metal stamping plant and a sport utility factory in Wisconsin by the end of the year.

Workers at the Grand Rapids Metal Center in suburban Wyoming were Monday told it will close by the end of 2009. The plant employs about 1,340 hourly and 180 salaried workers.

Earlier Monday in Janesville, Wis., workers got the news that SUV production at the plant, with 1,200 employees will end Dec. 23. The closure is earlier than GM had expected but was necessary because of declining sales, spokesman Chris Lee said. He would not say whether more plants would be closed. But CEO Rick Wagoner has said that the automaker would have to make similar adjustments at other factories, particularly in metal stamping.

Analysts say closing factories or cutting shifts will help GM reduce costs and preserve cash. GM has been burning up cash at a pace of more than $1 billion a month.

The announcements came on a day when both GM and Ford saw their shares rally as reports over the weekend of a possible merger between GM and Chrysler and of prior talks between GM and Ford gave investors hope that consolidation could help cure the ailing industry. GM added $1.62, to finish at $6.51; Ford rose 40 cents, to $2.39. Still, GM has lost 74 percent year to date, and Ford is down 64 percent.