The ongoing economic recession continues to impact the car industry and General Motors Company [NYSE:GM] with reduced revenue and the need to cut production. Reducing production means cutting back on labor, resulting in today's announcement of 2,000 jobs to be cut.

Along with the lost jobs, GM will be cutting back on output of specific models and doing away with the Cadillac XLR altogether. The Chevrolet Cobalt and Pontiac G5 will both see their numbers reduced as 800 jobs leave the Lordstown plant where they are built, reports Automotive News.

Heavier losses of 1,200 jobs at the Delta Township plant where the Buick Enclanve, GMC Acadia and Saturn Outlook are built will mean a significant reduction in output of those models as well.

The lack of available consumer credit, instability in the economy, and rising unemployment have conspired to drive down demand to very low levels. GM characterizes its production cuts as merely responsive to that drop in demand, returning the market to alignment.

GM will also be instituting intermittent production halts at ten other plants in North America, nine of which are in the U.S. The halts will come during the first half of the year, and will last for several weeks.

In a separate report, the Bowling Green Daily News has revealed some of the production cuts will also come from GM's Bowling Green plant, where the Cadillac XLR is built. The reductions will bring an end to XLR production. Only about 40 employees at the plant will be affected, since the XLR is a low-volume product.

Despite its very niche status - only about 1,250 of the cars were sold last year - the XLR was perceived by many as a sort of halo-car for Cadillac, and the loss of the car is being felt keenly by fans. Because of its relatively high $85,000-$100,000 price point and flagging demand, however, continued production simply can't be justified from a business perspective.

The reductions and cancellations aren't unexpected. Earlier today GM announced it would be delaying the Cadillac CTS Coupe until mid-2010, itself a car that is expected to slot into a similarly narrow niche as the XLR.

The plant also builds Corvettes, and though 154 workers from both lines will be laid off indefinitely as of March 1, the impact on Corvette production isn't expected to be significant.


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