General Motors to close Oklahoma City plant in February

DETROIT ? General Motors plans to shut down its Oklahoma City plant in the first week of February next year, the automaker told the plant's employees in a letter on Monday. The plant, which has

2,000 active union employees, is the first in a series of 12 facilities GM said it will close as part of a broader restructuring effort. The world's largest automaker has also said it will slash 30,000 jobs through 2008. The Oklahoma City plant builds the Chevrolet TrailBlazer EXT, GMC Envoy XL and Isuzu Ascender EXT SUVs. "The decision for this particular plant was volume- and market- driven," GM spokesman Stephan Weinmann said. "We just figured the products are not selling at the levels that we need to keep the plant up and running," he added. GM has been struggling with slumping sales of large sport utility vehicles due to high gasoline prices, as consumer tastes continue to move to vehicles that offer better fuel economy. "Given the market reaction to mid-size and full-size SUVs this year, it's only logical to close this plant," Argus Research analyst Kevin Tynan said. Combined U.S. sales of the TrailBlazer and Envoy fell to 319,591 units through November this year, down 16.4 percent from the same period a year earlier. Weinmann said GM will discontinue making the extended versions of all three SUVs, which allow for a third row of seats. As GM struggles with high health-care and commodities costs, loss of U.S. market share to foreign rivals and sputtering sales of its SUVs, many analysts worry that new job cuts will add to costs that are already too high. More job cuts at GM, which has lost nearly $4 billion this year, would mean more additions to its "jobs bank" benefit ? which union employees are entitled to under contract terms. Most workers would spend 48 weeks in "layoff status" ? which entitles them to government unemployment benefits and a supplemental payout from the automaker that brings their total payment to 95 percent of their take-home pay. The workers would then move into the jobs bank, which entitles them to their full gross pay until they are eligible to retire or placed in another job. GM spokesman Stephan Weinmann said GM is in talks with the union to negotiate early retirement packages.