Tuesday, December 26, 2006

Hummer builder will cut 160 jobs

Wednesday, November 29, 2006
Hummer builder will cut 160 jobs
AM General forced to trim H2 production by GM, which wants to stress sales of the H3.
Associated Press

MISHAWAKA, Ind. -- A slowdown in production of the Hummer H2 is prompting AM General Corp. to cut 160 jobs by the end of the year.

The job cuts were needed because General Motors Corp. has ordered that fewer H2 vehicles be produced next year, said Craig Mac Nab, a spokesman for AM General. The layoffs will leave the H2 plant with between 300 and 400 workers -- less than half the work force it had a few years ago.

As AM General is cutting production of the civilian H2, it has had trouble keeping up with orders for the military Humvee that is built at an adjacent factory in the city just east of South Bend.

Mac Nab said some of the workers being laid off from the Hummer plant could be hired to build the Humvees.

"We will try to absorb them into the military business," Mac Nab said. "But as I sit here, we can't say when or how many."

Sales of the H2 SUVs by GM have fallen amid higher gasoline prices as well as the introduction last year of the more affordable Hummer H3, which is built in Shreveport, La.

Sales fell from 35,000 in 2003 to about 17,500 this year, said Alex Rosten, an analyst for the automotive Web site Edmunds.com.

Rosten said high gas prices might impact H2 sales to some degree, but what hurts the vehicle most is its market-limiting price tag. He said the average H2 sells for about $59,712, while the average price for a large SUV is $39,816 and the average price for a luxury SUV is $49,065.

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