General Motors To Temporarily Close Plants And Cut Production

World's largest automobile manufacturer, General Motors Corp (GM) has decided to temporarily shut down its plants and reduce production. The recent move is taken owing to decline in the car sales. Apart from it, the US Senate has also rejected the bail-out package for the automotive industry. GM will cease the production of the 30 percent of its North American plants for the first quarter of 2009. The company has experienced a 36-per-cent drop in sales in November and a 41-per-cent decline in 2008 from the previous year.

For the last couple of weeks, the US auto market has been badly hit by the economic slump and consumers are suffering to get credit for vehicle financing. Almost all the major auto companies are experiencing plunging sales. Most of them are forced to cut production costs to sustain in the market. The recent decision of GM to shut down its plants will result in a cut of 250,000 in the production of cars.

In order to revive the auto industry, US has planned to implement a 14-billion dollar rescue plan. Although The House of Representatives approved the rescue plan, but the measure failed in the Senate, where Republican prevented Democrats from getting the 60 votes needed to end debate and go to a final vote. The failure of the 14-billion dollar rescue plan came as a setback for all the companies. The recent decision of GM is supposed to be the effect of rejection of bail-out package