DETROIT - General Motors Corp.'s efforts to hoard cash and outlast a prolonged economic slump claimed the jobs of more than 2,700 workers Monday as the automaker announced the demise of factories in Michigan and Wisconsin.
GM said it would shutter a metal stamping factory in the Grand Rapids suburb of Wyoming by the end of next year, and it also sped up the closure of its Janesville, Wis., sport utility vehicle plant, with most of that facility shuttering Dec. 23.
"I am sick about what's happened here," said Greg Golembiewski, president of the United Auto Workers local at the Wyoming factory, who thought the plant was safe because of its safety and productivity awards. "I am devastated. I'd like not to believe what I heard today. It's like a bad dream."
The moves came on a day when GM's stock finally showed signs of life after a catastrophic drop last week. The automaker's shares jumped $1.62, or 33 percent, to $6.51, after hitting $4 Friday, their lowest level 59 years.
The shares lost nearly half their value last week as broader markets tanked and investors feared GM, Chrysler LLC and Ford Motor Co. could run out of cash before the global economic slump ends. But they were bolstered Monday by the weekend revelation that GM held merger talks with Chrysler and as more support for the global banking system fueled a 936-point rebound in the Dow Jones industrials.
At the Grand Rapids Metal Center, managers gathered workers at the end of the first shift Monday to deliver the bad news, GM spokesman Chris Lee said. The factory employs about 1,340 hourly and 180 salaried workers.
Lee would not say whether further closures were planned, but he said the company "will continue to assess our stamping capacity and align it with market demand as required."
The Grand Rapids plant was picked for closure because more than 40 percent of its parts go to slow-selling truck and SUV plants, and because GM wants to cut shipping costs by keeping its stamping plants closer to assembly plants, Lee said.
"Unfortunately Grand Rapids is some distance away from their assembly plant customers and therefore doesn't really support that strategy that we're moving toward," he said.
Earlier Monday in Janesville, workers got the news that SUV production at the plant, with 1,200 workers represented by the UAW, will come to an end sooner than expected due to declining sales, Lee said.
The factory also has 35 to 50 workers making small- to medium-duty trucks. They will keep working through May or June to complete an order for Isuzu Motors Ltd., Lee said. Then the plant "will cease operations completely," he said.
Workers at both plants will get most of their pay from the company and unemployment benefits for up to two years under their union contract. They will have the option of transferring to other GM factories if jobs are open. Other conditions of their departure may be negotiated with the union, Lee said.
The Janesville factory primarily makes the GMC Yukon and the Chevrolet Tahoe and Suburban large SUVs, and sales of those vehicles have plummeted with an increase in gasoline prices past $4 per gallon earlier this year. Gas prices have subsided closer to $3 nationwide, but that has done little to boost sales.
"That segment is really shrinking, so we had to make the difficult decision to have this cessation," Lee said.
U.S. auto sales through September are down 13 percent from a year earlier, and last month they dropped to their lowest level in 15 years.
GM announced in June that it would close Janesville and three other factories as demand for pickup trucks and SUVs waned, but the only time frame that was given was by 2010. The company announced earlier this month that another of those plants — the Moraine, Ohio, SUV factory — will close Dec. 23.
GM Chairman and CEO Rick Wagoner has said that the automaker would have to make corresponding adjustments at other factories, particularly in metal stamping.
The Janesville plant opened in 1919 and is GM's oldest. Its closure comes despite an incentive plan offered to GM last month by Wisconsin political leaders.
State Rep. Mike Sheridan, a Janesville Democrat and former plant union representative, held out hope that the factory, once the city's largest employer, will stay open. He said in a statement that GM is still considering whether to build small cars there.
Lee said those discussions continue but have no bearing on the decision to end SUV production.
Suburban, Tahoe and Yukon sales are down by more than 40 percent so far this year, and sales in the large SUV segment are down 49 percent, according to Autodata Corp. GM also makes those vehicles at its plant in Arlington, Texas, and GM officials have said that plant can crank out enough to meet demand.
Industry analysts say closing factories or cutting shifts will help GM reduce costs and preserve cash at a critical time with the company losing billions and burning up cash at an alarming rate.
GM had $21 billion in cash and $5 billion available through credit lines at the end of June for total liquidity of $26 billion but has been burning up cash at a pace of more than $1 billion a month.
The company announced a plan in July that calls for cutting $10 billion in costs and raising another $5 billion through asset sales and borrowing through 2009.
On Friday night, word leaked that GM had talks with Chrysler LLC owner Cerberus Capital Management LP about an acquisition of Chrysler or some other combination. The talks have been shelved during the country's financial crisis.