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GM Said to Idle 15 Assembly Plants in May-July Period (Update1)

By Jeff Green

April 22 (Bloomberg) -- General Motors Corp., contending with a 49 percent decline in U.S. sales this year, will idle 15 North American assembly plants for at least a week from mid-May through July, a person familiar with the plans said.

The shutdown, similar to its shuttering of factories in December, January and February, is meant to control excess inventory of unsold models on dealer lots and doesn’t reflect permanent closings, said the person, who didn’t want to be identified because the plans weren’t yet public. GM intended to announce the moves at the end of the week, the person said.

“We don’t have anything to announce at this point,” Tom Wilkinson, a GM spokesman, said today “Any announcements we have to make we will make to our employees first.”

The shutdown heightens the pressure on Detroit-based GM as it tries to avoid a June 1 government-ordered bankruptcy and keep $13.4 billion in U.S. loans. GM has enough inventory on dealer lots for five months of sales of pickup trucks and three months for sport-utility vehicles such as the GMC Acadia, JPMorgan Chase & Co. estimated in a report today.

GM’s first-quarter U.S. sales decline was steeper than the industry’s 38 percent drop, which extended a 17-month slump. In February, the industry’s annual sales rate was the lowest since 1981.

GM, Ford Motor Co. and Chrysler LLC shuttered about 59 factories starting in December, with some remaining closed into February, to trim the number of unsold models at dealerships after sales slowed in 2008’s last quarter.

Associated Press reported earlier today that GM planned to idle some plants.

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

Last Updated: April 22, 2009 18:09 EDT

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