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USA - GM restores 3,000 jobs, prepares to raise output

General Motors Co said on Tuesday it planned to restore about 3,000 jobs at U.S. assembly plants and related facilities and is getting set to raise North American production by up to 45 percent next year. GM said it would add shifts at three assembly plants as the automaker consolidates production from plants that are closing or retooling, a process that would not add immediately to its production schedule for 2009.

But GM expects to increase North American production to about 2.8 million vehicles in 2010, up about 40 percent to 45 percent from 2009. GM had sharply curtailed North American production around its government-guided reorganization. GM said it would add shifts at three U.S. assembly plants next year, restoring 2,400 jobs, and expected to restore 600 jobs at related facilities across the United States that produce engines, transmissions, stampings and castings.

The addition of shifts at plants in Kansas, Indiana and Michigan comes at a time when U.S. auto industry sales are thought to have hit bottom and manufacturers are raising production to restore depleted vehicle inventories. U.S. dealer inventories were trimmed sharply after the federal government's "cash for clunkers" program lifted sales in July and August with incentives of up to $4,500 to turn in gas-guzzling vehicles and buy new more fuel-efficient models.

GM has been addressing severely low inventories resulting from a combination of the "clunkers" program that ran from late July through the first three weeks of August and production cutbacks around its government-funded reorganization. Mark LaNeve, GM's vice president of U.S. sales, said U.S. auto sales for GM and the industry have been slow, a situation expected with the end of the "clunkers" program.

"Our year-over-year comps will be difficult on both the fleet and retail side, but both accounts will get better beginning in October right through the fourth quarter," LaNeve said. GM said it would add a shift at its assembly plant in Fairfax, Kansas, in January. Fairfax will become the sole builder of the Chevrolet Malibu sedan when GM ends production in Orion, Michigan, to retool that plant for a new small car.

In April, GM plans to add a shift of heavy-duty pickup production in Fort Wayne, Indiana. The company is closing its Pontiac, Michigan, plant at the end of September. GM also plans to add production of the Chevrolet Traverse SUV at its Lansing Delta Township, Michigan, plant in April. Production of the Traverse at GM's plant in Spring Hill, Tennessee, will end in November, and that plant will be put on standby status.

GM will draw from its pool of laid off workers first to fill the positions and expects virtually all of the spots to be filled by workers now on layoff or who would be subject to layoff once other plants are idled, executives said. Earlier in September, GM said it expected to build 535,000 vehicles in North America in the third quarter and 655,000 in the fourth quarter, down about 20 percent from a year ago.

GM expects U.S. auto industry sales of about 10.5 million vehicles in 2009, down from about 13.2 million last year. It expects U.S. auto industry sales of 11.5 million to 12 million in 2010.

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