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November 20, 2008

US automaker to shut down plant, cut jobs in Thailand
The Thai unit of troubled U.S. carmaker General Motors plans to shut down its Rayong plant for two months from mid-December due to falling demand caused by the global economic slowdown, Reuters quoted the company as saying Thursday.

GM Thailand also planned to cut 258 jobs at the plant, which produced about 100,000 vehicles last year, director of public relations Chartchai Suwanasevok told Reuters.

Given that existing supply is in excess of demand, automobile production would be suspended in December and January, Chartchai was quoted as telling local daily Bangkok Post.

GM’s Rayong plant has an annual capacity of 130,000 units, manufacturing Colorado pickups, Captiva SUVs, Optra sedans and Aveo compact cars. Capacity utilisation this year was estimated at 100,000 units. Most of the output is exported.

For the almost 2,000 workers at the plant, their current status as GM employees will be intact but their monthly pay will be cut by 25 percent during the work suspension, the daily reported. About 1,000 white-collar staff working for GM and Chevrolet Sales Thailand will not be affected.

The plan comes despite Chevrolet Sales Thailand, the GM distribution arm, reportedly continued to perform well in local vehicle sales this year. The highest growth was seen in February when sales rose 71.3 percent from the year before. The sales figures were compiled by Toyota Motor Thailand.

However, the sales fell in September by 3.2 percent year-on-year to 1,754 units and by 47.9 percent to 1,172 units in October. The Colorado pickup is Chevrolet's most popular model and its sales, like those of other pickups, were affected by record-high diesel prices earlier in the year.

Toyota Motor Thailand, the country's biggest carmaker, also confirmed this week that its output next year would be lower than this year's estimated 570,000 units because of expected lower demand in Thailand and abroad.

The announcements by the two Thailand-based carmakers come at a time when the country’s automotive industry is starting to feel the increasing effects of the global recession. More pain is on the way, according to the industry consultancy CSM Worldwide.

Local production is expected to fall by 16% to 1.2 million units from 1.4 million this year as domestic sales decrease to between 580,000 and 590,000 units from 670,000 units, according to Hajime Yamamoto, director of CSM's Bangkok office.

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