DETROIT -- General Motors is eliminating one production shift at the Michigan plant where the Cadillac ATS and CTS are made, a reflection of new brand chief Johan de Nysschen's vow to fix excess production and high inventories that have plagued Cadillac over the past year.
GM will cut production to one shift, from two, at its Lansing Grand River plant, spokesman Bill Grotz confirmed Tuesday. He said about 350 workers will be laid off beginning in January. GM will seek to move some of those people to one of the company's two other plants nearby, he said.
The move will leave the facility with about 1,075 production workers on one shift. The line speed will be accelerated to produce more vehicles on that remaining shift than usual, Grotz said.
GM expects to resume a second shift at the start of production for the next-generation Camaro, which is being moved to Lansing from Canada. Grotz wouldn't say when that would happen.
"We see this shift coming back when the Camaro comes online," Grotz said.
Sources have told Automotive News that production of the next-gen sports car, which is moving to the same platform as the ATS and CTS, is scheduled for late 2015 or early 2016.
The move comes amid continued high inventories of the ATS and CTS, as sales of those cars have fallen short of GM's forecasts. Many dealers have said that price increases of $10,000 or more on many CTS models, redesigned for the 2014 model year, have driven away some returning customers.
On Nov. 1, there was a 151-day supply of ATS models on dealership lots or en route to stores, down from 166 a month earlier. Supply of the mid-sized CTS fell to 113 days, from 161, after Cadillac offered heavy incentives in October to help clear a persistent glut of cars.
The move to cut production is in keeping with de Nysschen's promise of creating more “product exclusivity” for Cadillac and avoid the need for heavy incentives that ultimately damage brand value.
"Either you have to bring your volume aspirations into alignment with reality and accept that you will sell fewer cars, or you have to drop the price," de Nysschen told Automotive News in September. "It's better to build off a very solid base in terms of product credibility, charge a fair price for the car, and realize you have to wait until the volume comes."
GM idled the Lansing Grand River plant for three weeks in late August and early September to align supply with weaker-than-expected demand.
Cadillac's U.S. sales have cooled this year after surging 22 percent in 2013, among the best performances in the industry. U.S. sales through October dropped 5 percent, vs. 7 percent growth for the luxury market overall.
U.S. sales of the ATS were down 19 percent through October. The compact sedan has faced fresh competition this year from lower-priced German entries, such as the Audi A3 and Mercedes CLA.
CTS sales in the U.S. have fallen 2 percent, despite glowing media reviews that generally put the car on a par with rivals such as the Mercedes E class and BMW 5 series.
Grotz said GM remains "committed to a strong and lasting presence in Lansing," citing about $280 million in recent investments in plants there. GM also makes the Chevrolet Traverse, GMC Acadia and Buick Enclave at a separate assembly plant nearby.
