GM and Toyota to cut Thai output

By Viparat Jantraprap

BANGKOK (Reuters) - General Motors Corp and Toyota Motor Co said they will cut production at their plants in Thailand, the latest move by global automakers seeking to slash costs in the face of weak sales and deepening economic gloom.

GM Thailand said its 130,000-unit-a-year factory at Rayong would close for two months from mid-December, and it would cut 258 jobs at the plant 150 kms (90 miles) southeast of Bangkok.

"We plan to close the plant to help control costs and our 2,000 workers will be paid 75 percent of their monthly salary during the shutdown," spokesman Chartchai Suwanasevok told Reuters, without giving details on the production impact.

The plant produced about 100,000 pickup trucks, SUVs, sedans and compact cars for Thailand, Southeast Asia and Australia in 2007, representing only a fraction of the Detroit-based firm's global output of 9.28 million vehicles last year.

But the shutdown was the latest measure taken by international auto firms to stave off the impact of a massive slowdown in sales due to the global economic slowdown.

General Motors and its U.S. rivals, Ford Motor Co and Chrysler LLC, are seeking a $25 billion U.S. government bailout to avoid bankruptcy, but the prospects for a rescue package this week appeared dim.

Last week, GM's South Korean unit said it would halt production for two weeks, due to sluggish demand.

GM had no plans to halt production at its vehicle manufacturing ventures in China, a spokesman said, despite slowing growth in the world's second-largest auto market.

TOYOTA CUTS TOO

Japanese automakers, many of which had enjoyed steady to rapid growth in recent years, are also scaling back production and workforce in many markets due to a sharp, broad-based slide in vehicle sales.

Toyota also planned a cutback at its 200,000-unit-a-year plant in Thailand, a company spokeswoman said, without giving details.

Japan's top automaker is also seeking early retirement for 340 of its 1,850 temporary workers at the Gateway plant, which builds the Camry, Corolla, Yaris and other cars for Thailand and markets in the region.

Toyota is Thailand's top brand, but its sales fell 21 percent in October compared to a year ago, worse than the market's 15 percent slide as slowing economic growth and a long-running political crisis eroded consumer confidence.

"There are signs of a slowdown not just in Thailand, but in the markets of export destinations," the spokeswoman said.

Shares in Thai auto parts firms fell on news of the shutdown and the gloomy outlook for their sector.