(Updates with quotes from Ford)
By Michael Ellis
DETROIT, Jan 23 (Reuters) - General Motors Corp. said it was halting production at a commercial truck plant for eight weeks due to flagging demand amid a slow U.S. economic recovery, even as it raised incentives on other vehicles to boost sales.
GM, the world's largest automaker, also said it will halt production for two weeks at its Wilmington, Delaware, plant, where it makes the slow-selling Saturn L Series mid-size car.
Despite those cuts in production, GM still expects its total vehicle production in North America in the first quarter to grow to 1.43 million vehicles, up more than 5 percent from 1.353 million a year ago.
Several GM plants will work overtime next week, including its Arlington, Texas, and Fort Wayne, Indiana, full-size pickup truck plants.
GM Thursday raised cash rebates on its Chevrolet Silverado, GMC Sierra and Chevrolet Avalanche full-size pickups to $2,500, an increase of $500, GM spokesman Jeff Roegner said.
The Dodge Ram pickup truck from DaimlerChrysler AG showed strong sales last year at the expense of GM and Ford Motor Co.
GM is also offering dealers up to $1,000 on every car or truck that has gone unsold for more than 120 days, Roegner said. That offer covers a small number of vehicles, and they must be sold by the end of the month, he said.
Last week, Ford said it would waive up to eight months of current lease payments on four of its top-selling Ford brand vehicles if those current customers lease or buy a new Ford brand car or truck.
But Ford's head of revenue management said in an interview with Reuters U.S. incentives are so high any further increases would hurt profits more than boost sales. He added that Ford would not surrender market share to the aggressive GM.
However, GM, which has led Detroit's price war, last week reported stronger earnings and profit margins for the fourth quarter, as high incentive costs were offset by stronger sales and cost-cutting.
Automakers often adjust their incentives mid-month depending on sales projections and competitors' offers.
Several Wall Street analysts have said that they expect GM's sales to drop sharply in January from year-ago levels due to its heavy incentives and strong sales at the end of last year, which pulled some sales ahead. Analysts also said they expect Ford sales to climb in January.
Beginning next week, GM's Flint, Michigan, commercial truck chassis plant will halt work for a total of eight weeks before the end of September, impacting about 500 workers at the plant, GM spokesman Dan Flores said.
The plant will be shut for a week each month, except July, when the facility is closed for an additional two weeks for the annual summer shutdown, when all plants are closed.
The weak economy is causing small businesses to curtail investments in capital goods. An outfitter which converts GM's commercial truck chassis into a dump truck or a tow truck or another application, can charge $100,000 for each vehicle, Flores said.
GM's two-week shutdown of its Wilmington plant will impact about 1,300 workers. Total U.S. sales of the Saturn L Series, competing in the competitive mid-size segment, fell 17 percent last year to 81,172.
Earlier this week, GM said it would lay off an undetermined number of workers at its Hamtramck, Michigan, plant, where it makes the Cadillac DeVille, Buick LeSabre and Cadillac Seville large cars.
GM shares were up 58 cents or about 1.5 percent at $38.36 in mid-afternoon trade on the New York Stock Exchange, while Ford shares were up 23 cents or 2.4 percent at $9.97.