GM Plant Shutdown Continues

US auto Giant, General Motors hopes to sail through the tough times with an auto bailout package in the US. The GM, Indian plants too suffer the economic conflicts.It has shut down its operations at Halol (Gujarat) and Talegaon (Maharashtra) plants for more than two weeks due to poor sales. The Gujarat plant has the capacity to produce 85,000 units annually and employs 16,000 people, while the Pune plant produces 1, 40,000 units and employs 700 people.

GM Vice-President P Balendran, “The entire country is going slow on consumption. Auto sector for one, is the worst hit. Considering we are unable to match our sales targets for the calendar year, we have shut down our manufacturing facilities in Halol and Talegaon. Although the shut down has been for annual plant maintenance, we have decided to keep the plant closed for an extended period due to poor sales.” GM’s Gujarat plant expanded its Halol facility in 2007 from 60,000 to 85,000 units. It has been manufacturing the Chevrolet Captiva, Chevrolet Optra, Chevrolet Aveo, Chevrolet SR-V, Chevrolet Aveo U-VA and Chevrolet Tavera for the Indian market. Apart from this by September 2009, the company inaugurated another manufacturing facility in Maharashtra with an investment of Rs 1,400 crore to take its total production to 2.25 lakh units annually.

Currently, the company runs one shift at Talegaon and two shifts at Halol. In 2008 calendar year, GM was expected to sell 85,000 units churned out from its Halol plant and 5,000 units from the Talegaon plant. However, much below its expectations of selling 90,000 units, GM has managed to sell 61,661 units till November 2008. “We would possibly touch 65,000 by the end of this calendar year. But then, it is far below our expectations,” he said. “We have requested the Gujarat government for a 2.5% reduction in VAT, but are yet to hear from them,” Mr Balendra added.

While most carmakers reported decline in sales growth, GM India’s passenger car sales, however, marginally grew in November to 3,673 units against 3,653 units in the corresponding month last year. In fact, last month the company had increased the production in this segment by 19.61% to 4,842 units compared with 4,048 units in the same month last year.

GM, which usually observes annual maintenance from December 24 to December 31 every year, preponed the period by 10 days this year to beat slowdown blues.The plants have been shut since December 15 and the company expects to resume operations only from January 1, 2009.