GM will rehire 500 Michigan workers slated for layoffs

By David Shepardson

WASHINGTON (Reuters) - General Motors Co plans next year to rehire 500 Michigan assembly plant workers who are to be laid off in May, citing increased demand for larger vehicles, the company said on Wednesday.

GM said last week it planned to lay off 1,100 workers in May at its Lansing Delta Township assembly plant in Michigan. The company is moving production of the GMC Acadia mid-size SUV to Spring Hill, Tennessee, from the factory, which will build just two models, the Chevrolet Traverse and Buick Enclave SUVs.

The company said that when it begins full production of the new versions of the two models in 2018, it would "bring back approximately 500 jobs to give the company flexibility to meet market demand."

Last year, pickups and SUVs accounted for 59.5 percent of U.S. auto sales, up from 55.8 percent in 2015.

GM also said it would add 220 jobs at a plant in Romulus, Michigan, that is building 10-speed automatic transmissions, and it would retain 180 jobs by shifting Lansing workers to a Flint assembly plant to support pickup truck production.

The announcement came as U.S. President Donald Trump visited Michigan to announce his administration will review fuel efficiency standards, a move that could help automakers sell more larger models.

Trump praised recent job announcements by Ford Motor Co , Fiat Chrysler Automobiles NV and GM.

"That's just the beginning," he said in a speech to autoworkers in Ypsilanti, Michigan, on Wednesday. "I told (the auto executives) that's peanuts, that's peanuts. We're going to have a lot more. They're going to be building new plants, expanding their plants."

Trump has discouraged the industry from investing in Mexico and urged foreign automakers on Wednesday to add U.S. production at a roundtable that included executives from Toyota Motor Corp , Volkswagen AG and others.

GM did not credit Trump with the decision to add jobs.

"We haven't fundamentally changed any of our plans, but we continue to look for ways to improve our operations and find ways to help the country, grow jobs and support economic growth," GM spokesman Pat Morrissey said.

With analysts forecasting U.S. auto sales are at or near their peak, no automaker has announced plans to build a new plant despite pressure from Trump.

The Detroit automaker in recent months has announced other U.S. job cuts and new investments. GM said in January it would invest another $1 billion in its U.S. factories.

GM said in November it would cut about 2,000 jobs when it ended the third shift at its Lordstown, Ohio, and Lansing Grand River, Michigan, plants in January. In December, it said it planned to cancel the second shift and cut nearly 1,300 jobs from its Detroit-Hamtramck assembly plant in March.

(Reporting by David Shepardson; Editing by Lisa Von Ahn and Phil Berlowitz)