General Motors (www.gm.com) has announced that it intends to cut production and ‘release’ 1,100 workers at a plant in Michigan, as it moves production of a sport utility vehicle model to a factory in Tennessee.

The Lansing Delta Township plant will cease output of Acadia SUVs on 12 May, GM spokesman Tom Wickham said. The largest US car maker will build the revamped Acadia at its factory in Spring Hill, creating about 800 new jobs there.

Bill Reed, president of the union that represents the Michigan plant’s workers, said: “Many of the staff who’ll be affected by the production shift from the Lansing plant are temporary employees.”

He said he is confident that GM will add a new model to the plant’s assembly line, allowing some of the laid-off workers to eventually be called back.

“They say the lay-offs are permanent, but I don’t think it will be long before they get us to full capacity again. We’re profitable, and every indication is that we will get another product.”

The move follows GM’s decision earlier this month to pull out of production in Europe, selling the Opel and Vauxhall brands to French car-maker PSA for 1.3 billion euros.

Europe has produced 16 years of losses for GM, totalling $15 billion. While the transaction is expected to drop GM from its position as the world’s third-biggest car maker (in terms of sales), analysts believe that it could give the company $1.4 billion in available cash-flow.

Maryann Keller of the US automotive consultancy Maryann Keller & Associates, described the sale as “common sense” and said: “The height of Europe’s technical leadership was when cars were largely propelled by mechanical components, but that leadership has eroded with the introduction of advanced electronics in all vehicle systems.

“With the automotive industry now aiming for autonomous and connected cars, the epi-centre of technical leadership is in the USA — not across the Atlantic.”