Jan. 26 (Bloomberg) -- General Motors Corp. plans to eliminate shifts in the second quarter at plants in Ohio and Michigan, shedding about 2,000 jobs, and will cut production at 13 other U.S. and Canadian plants as U.S. sales drop further.

The Detroit automaker, which already closed most of its 22 plants in North America this month because of slow sales, is taking the additional steps into next quarter after GM cut its estimate for U.S. sales this year to 10.5 million, GM spokesman Chris Lee said.

GM didn’t project the total vehicle production cut. By paring manufacturing, eliminating brands and negotiating costs with unions and debt holders, it’s trying to prove it can become profitable to keep $13.4 billion in government loans pledged by the U.S. Treasury. Chrysler LLC, Ford Motor Co. and Toyota Motor Corp. are also reducing output in North America.

“I haven’t seen this many closings at the same time in the 20 years I’ve been covering the industry,” said Haig Stoddard, a forecaster at IHS Global Insight in Troy, Michigan. He is predicting production at a 27-year low, including further cuts at GM factories that make pickups and sport-utility vehicles. “It’s very dramatic.”

GM fell 9 cents to $3.40 at 2:52 p.m. in New York Stock Exchange composite trading. A year ago the stock closed at $25.79.

Industrywide sales of 10.5 million vehicles in the world’s biggest auto market would be the lowest level since the 10.4 million units sold in 1982, according to research firm Autodata Corp. of Woodcliff Lake, New Jersey.

Vanishing Hours

GM has cut U.S. hourly employment to 64,000 from 111,000 in 2004, the last year the automaker had an annual profit.

Deliveries in the U.S. plunged industrywide to 13.2 million in 2008 after averaging about 16 million annually during the past decade. U.S. job losses last year were the worst since 1945. Global economic growth this year may slow further, to 0.5 percent from 2.3 percent, GM said Jan. 15.

IHS Global Insight has predicted U.S. sales of 10.4 million this year. North American vehicle production may fall to 9.5 million this year from about 12.6 million last year, the lowest since 8.5 million in 1982, Stoddard said. Automakers report revenue when a car leaves the factory for the dealer.

Chrysler LLC extended a monthlong production shutdown by one week, to today, at three plants in Illinois, Michigan and Mexico. Chrysler closed all 30 of its plants last month until at least Jan. 19 after the automaker’s December auto sales declined 53 percent. Chrysler has received $4 billion in government loans and has said it will seek $3 billion more.

Burden of Proof

Both automakers have a Feb. 17 deadline to show progress on plans to reduce costs and prove their viability before March 31, when the government will decide whether they have made sufficient progress or must return the money. The U.S. Treasury under George W. Bush pledged the funding Dec. 19 after Congress failed to reach an agreement on a rescue plan.

If the companies fail, the U.S. Treasury has said the loans can by used to operate the companies in bankruptcy, which GM and Chrysler have said they want to avoid.

Beginning Feb. 2, GM will alternate between morning and afternoon shifts at a Lansing, Michigan, plant that makes Buick Enclave and GMC Acadia sport-utility models until the afternoon shift is ended March 30, eliminating about 1,200 jobs, Lee said.

The automaker also will alternate schedules at the Lordstown, Ohio, plant that makes the Chevrolet Cobalt starting Feb. 9 and end the second shift on April 6, he said. GM also will have various temporary production cuts at 12 plants in the U.S. and one in Canada extending into the second quarter, Lee said.

Suppliers’ ‘Worst February’

Previous production cuts were already beginning to squeeze companies reliant on sales to automakers. A trade group representing Lear Corp., TRW Automotive Holdings Corp. and other suppliers said it’s already preparing to ask for U.S. government funding in the next few weeks to avert hundreds of bankruptcies because of the slowing U.S. sales.

About a dozen chief executives and chief financial officers are meeting today to complete a request for federal aid as auto- parts makers face the “worst February payday in decades,” according to a statement on the Web site of the Motor & Equipment Manufacturers Association.

U.S. automakers pay about $15 billion to suppliers on the second Tuesday of each month for parts delivered in the previous 45 to 75 days, the statement said. The next payment will fall to $5 billion to $7 billion because of extended vehicle production slowdowns in December and this month.

GM factories that are most vulnerable to more eliminated shifts or other production cuts are the large-SUV plant in Arlington, Texas; Michigan plants in Hamtramck, Flint, Lansing and Pontiac; and a van plant in Wentzville, Missouri, Stoddard said.

“They will probably end up doing a little more,” he said. “I wouldn’t be surprised if they closed another pickup plant in the U.S. altogether.”

To contact the reporter on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

Last Updated: January 26, 2009 14:56 EST