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L-Series Flop Causes GM to Lay Off 500 Saturn Workers

30 May 2000

Lack Of Sales Helps GM decide to Lay Off Almost 500 Workers.

Friday May 26, General Motors Corp. said its Saturn division will lay off
almost 500 workers -- or about 20 percent of the unionized work force --
from its Wilmington, Del. assembly plant due to poor sales of its new
L-Series mid-size sedan and wagon.

Per GM , effective June 12, the Saturn plant will permanently switch to a
single shift, cutting annual capacity to 80,000 to 100,000 units with upside
potential with overtime, from about 200,000 units with two shifts working
full-time, said Saturn spokeswoman Sue Mallino.

  The layoffs represent about 20 percent of the work force of 2,413
unionized employees, she said. Employees who live in Delaware will receive
95 percent of their pay for 26 weeks before they are put into a GM jobs pool
and become eligible for employment at other GM facilities. Employees living
in other states will receive similar benefits, Mallino said.

``With our current inventory, along with our overtime upside potential, we
feel we need to move to a one shift operation,'' Mallino said. ``We are
still looking to increase sales month to month. So far, May is tracking
well.''

According to Reuters, "last summer, Saturn launched the L-Series, its first
foray outside the small car segment, to compete against the heavyweights
Toyota Motor Corp. (7203.T) Camry, the Honda Motor Co. Ltd. (7267.T) Accord
and the Ford Motor Co.  Taurus. The vehicle received generally favorable
reviews, however, sales have been far lower than expected and many analysts
have declared it a flop."