02 June 2009

Michigan Economy Gets Another Hard Blow To Absorb

Story from Detroit Free Press

NEW YORK -- Half of the 14 General Motors Corp. factories slated to be closed are in Michigan, another devastating blow to communities throughout the region that have endured cutbacks for years.

The Michigan facilities employ an estimated 9,000 salaried and hourly workers, according to GM's Web site.

A bright spot for the state, however, is that one of the assembly plants slated to be idled -- Orion Assembly -- is being considered for retooling to make a yet-to-be named small car that was promised as part of the most recent round of labor negotiations with the UAW.

Orion was one of several plants placed on standby status by GM, which is considering bringing new work to three sites. The others are an assembly plant in Spring Hill, Tenn., along with a recently closed facility in Janesville, Wis.

"Those will be the three plants we will consider," said Tim Lee, GM North America vice president of manufacturing.

The plants that do not receive the future small-car project likely will be closed.

Erich Merkle, an auto industry analyst, said the Orion plant has the benefit of being close to the auto industry's supplier base in Michigan. He said the Janesville plant is probably too old to get the work.

"Spring Hill is your toughest competition," he said. "It's the newer plant, and they make engines there, so it's not just an assembly facility."

Four assembly plants were targeted for closure or standby in addition to the Spring Hill and Orion facilities.

GM's Orion assembly plant, which builds the Chevy Malibu and Pontiac G6 midsize cars, is to be put on standby in September and the Pontiac facility, where the Chevrolet Silverado and GMC Sierra pickups are built, is to be closed by October.

The Orion plant has about 3,400 hourly and salaried workers, while the Pontiac plant had 1,470 workers this spring, the company's Web site said.

The fourth assembly plant on the closing list is in Wilmington, Del., where the Pontiac Solstice and Saturn Sky are built. The plant employs about 1,000 people.

Four stamping plants were slated for closure or standby status.

The Grand Rapids stamping plant, which already was slated for closure, is to close this month. It had 800 workers at last count. The Pontiac stamping plant, which has nearly 1,300 workers, is to go to standby in December next year. The company also announced six powertrain facilities are to be closed.

In Michigan, the Livonia Engine, Flint North Components and Willow Run plants are to close next year. The three facilities employ more than 2,100 people.

"Under this plan, the new GM will achieve full capacity utilization of its assembly operations in 2011, two years ahead of what was scheduled in its Feb. 17 viability plan submission," the company said. "This will result in lower fixed costs per vehicle sold, and lower and more efficient capital investment."

In addition to the 14 plants being closed, GM's Service and Parts Operations will end operations at parts distribution centers in Boston, Columbus, Ohio, and Jacksonville, Fla., by Dec. 31.

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