GM axes shift at Michigan pickup truck plant

DETROIT, Oct 19 (Reuters) - General Motors Corp (GM.N) said on Friday it would cut the second shift at a truck plant in Pontiac, Michigan, to adjust production levels in response to slack demand for pickup trucks.

The cut in production would take effect next May, GM said.

The company's Pontiac plant employs about 2,700 hourly workers and makes the Chevrolet Silverado and GMC Sierra full-size pickup trucks, which were launched late last year.

GM spokesman Tom Wickham said the automaker would work out details of layoffs from the reduced production with the United Auto Workers union.

The assembly plant produces 45 vehicles per hour, but that production rate could also be adjusted after the second shift is cut, Wickham said.

GM was taking the action due to a decline in industry-wide sales for pickup trucks even though the Silverado and Sierra have gained market share for the automaker in the highly competitive segment, Wickham said.

"The segment sales have continued to trend lower," he added.

Analysts have said a weaker U.S. housing market and weak demand for new construction have weighed on truck sales since many are used in related businesses.

The GM announcement comes three days after GM said it would cut production at a Detroit assembly plant that makes the Cadillac DTS and Buick Lucerne sedans.

Last week, roughly 73,000 UAW-represented GM workers ratified a new four-year contract that allows GM to bring in new hires at roughly half the wages it pays existing workers.

GM has said it is negotiating a round of buyouts with the union targeting the 75 percent of its work force to be eligible for retirement by the expiration of the new contract in 2011.