DETROIT -- General Motors is laying off 160 workers and trimming production at the assembly plant where it makes the Chevrolet Sonic and Buick Verano amid weaker-than-expected demand for the small cars.
GM spokesman Bill Grotz confirmed the planned job cuts at GM's Lake Orion plant in suburban Detroit. He said the layoffs will be done in phases, starting in January.
"Lake Orion Assembly will adjust plant production capacity to better align with market demand," Grotz said in an e-mail today.
GM is reducing overall production at the plant by about 16 percent, from 45 cars per hour to about 38, according to a plant worker who didn't want to be identified discussing company plans. Grotz declined to comment on the extent of the production cuts.
GM officials notified workers of the plan at a meeting this morning, the source said. The layoffs are to begin Jan. 5, the person said.
Demand for the Sonic has stayed healthy this year despite a sharp fall in gasoline prices, which analysts say could dent demand for small cars. Sonic sales rose 9 percent in the first 10 months of the year, to 83,210 vehicles. Verano sales fell 6 percent, to 37,391.
Inventories of both cars swelled in October, though. GM reported about 22,200 Sonics either on dealership lots or en route to stores as of Nov. 1, a 114-day supply, vs. 54 days a month earlier. Verano inventories grew to about 12,000 cars, a 106-day supply, vs. 77 a month earlier.
Through October, GM has made about 94,000 Sonic sedans and hatchbacks and 45,000 Verano sedans at Orion, the Automotive News Data Center estimates. The plant employs about 1,660 hourly workers and 160 salaried employees, according to GM.
GM invested more than $500 million in the Orion plant in 2010 to prepare it for assembly of the Sonic and Verano. The 4.3 million-square-foot plant, much of it unused, is a likely candidate to get additional work in coming years as GM expands its vehicle lineup.
Edmunds.com senior analyst Jessica Caldwell said lower gasoline prices could be accelerating a shift toward larger vehicles and away from small cars, which tends to happen naturally in the fall because of seasonal buying patterns.
"At this point of the year we see a distinctive shift towards larger vehicles -- trucks and larger SUVs -- which is more pronounced now because of low gas prices," she said.