General Motors Corp. late Friday said it would cut North American production in the first quarter by 250,000 units, or 30%. The cuts, which will impact 14 plants in the U.S., follow a November when sales dropped 36% year-over-year. In 2008 so far, GM's sales are down about 41%.
The pain is not limited to U.S. automakers either. Toyota Motor Corp. said Monday it would delay opening a new plant in Mississippi indefinitely. The plant, which was scheduled to begin production in 2010, was expected to produce Toyota's highly popular Prius hybrid.
The U.S. automakers are seeking upwards of $34 billion from lawmakers to help them weather the economic downturn, with General Motors and Chrysler LLC warning they could be forced to seek Chapter 11 bankruptcy protection absent help.
Lawmakers might want to note Toyota's actions when considering bailout proposals. While many in Congress hope to tie any assistance to mandates that the auto companies speed the introduction of greener powertrains and automobiles, Toyota's decision to delay opening the Mississippi hybrid plant is evidence that offering more fuel-efficient vehicles is no panacea.
Elected officials worried about recouping taxpayer money to be lent to the automakers might be wise to avoid placing limits on what these companies can sell in the future if they are serious about creating healthy, profitable entities able to pay the government back. -
Lou WhitemanSee GM's press release announcing the cutsSee DealWatch: Autos
While Detroit's Big Three await details of a short-term aid package from the U.S. government, the auto companies are wasting no time scaling back capacity in response to slumping sales. 
