UPDATE 1-GM cuts shifts, output at three car plants

DETROIT Fri Dec 5, 2008 10:28am EST

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DETROIT Dec 5 (Reuters) - General Motors Corp (GM.N) said on Friday it was cutting shifts at three North American assembly plants in response to declining demand in a move that will lay off almost 2,000 union-represented factory workers.

GM's November sales dropped 41 percent, a collapse the automaker said reflects the recessionary U.S. economy, tight credit and worries about whether GM will survive the crisis.

"We're shrinking because the market is shrinking," said GM spokesman Chris Lee.

The production cuts were announced as GM Chief Executive Rick Wagoner testified before the U.S. Congress in an effort to convince lawmakers to extend up to $18 billion in emergency funding.

GM said it would eliminate third shifts at plants in Orion, Michigan; Oshawa, Ontario; and Lordstown, Ohio.

The Orion plant makes the Chevrolet Malibu and the Pontiac G6. The Oshawa plant makes the Chevrolet Impala. The Lordstown plant makes the Chevrolet Cobalt and the Pontiac G5.

The third shift will be eliminated in Orion and Lordstown during the week of Feb. 2 and in Oshawa during the week of Feb. 9, said GM spokesman Chris Lee.

In addition, GM will idle its Fairfax assembly plant in Kansas City, Kansas, during the week of Jan. 19. That plant, which makes the Saturn Aura and the Malibu, had already been scheduled to be shut down for the first two weeks of January.

Workers in the Michigan, Ohio and Kansas, plants are represented by the United Auto Workers. The Canadian Auto Workers union represents workers in Oshawa.

GM, Ford Motor Co (F.N) and Chrysler LLC CBS.UL are seeking a combined $34 billion in federal loans and credits. Both GM and Chrysler have said they need funding as soon as this month to avoid insolvency. (Reporting by Kevin Krolicki; editing by Jeffrey Benkoe)

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