The impact of the COVID-19 pandemic on market demand has prompted General Motors Co. to lay off the third shift at its Spring Hill, Tennessee plant.
The layoff, which comes a week after GM initially postponed the changeover, affects 680 employees at the plant where the Cadillac XT5, XT6 and GMC Acadia SUVs are built. Transfer opportunities to other plants depend on the provisions of the GM and UAW labor agreement.
“Current market conditions continue to evolve as we see the impact of COVID-19,” GM spokesman David Barnas said in a statement. “We believe that the best way to react to this unforeseen change in our market is to reduce production and operate in two effective shifts immediately. This adjustment allows the plant to maintain stable production, protect the value of our brands in any sales environment and provide the least impact to future plant employment. “
Spring Hill is, so far, the only genetically modified plant to see a coronavirus impact causing demand to drop. GM continues to push to return to full production at all its plants in late June after restarting them in mid-May after an eight-week pandemic-induced shutdown.
The plant had three shifts before closing in mid-March when the coronavirus began its aggressive spread across the country. The third shift was scheduled for June 21, said Mike Herron, president of the local Spring Hill United Auto Workers store, local 1853, but GM postponed the call last week and then decided to cut the shift indefinitely.
“This is a direct result of the market that just didn’t recover as quickly as we thought it would,” said Herron. “We really had plans to bring everyone back and it just didn’t materialize because the market didn’t materialize.”
XT5 sales in the first quarter of 2020 decreased 32% year-over-year as a result of the coronavirus pandemic. The new XT6, a three-row crossover, had just over 5,074 sales. GMC Acadia sales fell 43%.
Herron was concerned when the economy closed during the coronavirus pandemic and is still “quite concerned” about the effects.
“We’ve just never seen something like this when everything goes completely off,” he said. “The industry closes. The economy closes. I was concerned. I am still quite concerned because I think we are only seeing some of the results of this.”