Rumor: GM to Temporarily Close Most US Plants

It appears GM is in for a very long summer, as sources familiar with the survival plan being drafted by the American manufacturer claim most its factories in the US will be closed for a period of up to nine weeks. Such a move is due to the growing vehicle inventory, ever decreasing sales and the not so bright sales forecasts, the direct result of the continuing talks of bankruptcy, AP reported.

The exact dates and plants to be closed this summer are not yet known, but the most likely scenario is that the closure will occur around of the normal two-week shutdown in July. GM declined to comment, saying that the company will first notify the employees of such a move and only then make the decision public.

Such a decision made by GM will have a huge impact on the parts suppliers, who are already fighting for their survival. "It's one of those things we've been dreading for a long time," Jim Gillette, CSM Worldwide director of financial services told the source. "It's as bad as its ever been."

On the other hand, car dealers, who already have huge stockpiles of cars, don't see such a move as being as bad as it would first appear. "Nine weeks seems like an awful long time, but the way business is, not an awful lot of cars are being sold anyway," George Tasker, Martin Chevrolet fleet manager said.

Separately, GM will lay off an additional 1,600 workers this week, as part of its plan to reduce workforce by 10,000 employees worldwide by June 1. "In these unprecedented times, GM is reinventing every aspect of our business, including our organizational size and structure, to create a lean and agile company," GM told the employees in an open letter.