GM Announces 11 Plant Closings; More to Come
GM Announces 11 Plant Closings; More to Come
Nov. 06, 1986
DETROIT (AP) _ General Motors Corp. will close 11 plants employing more than 29,000 workers over the next three years to reduce overcapacity and cut losses at the No. 1 U.S. automaker, the company said Thursday.
Closing the three stamping, one body and seven final assembly plants in Michigan, Illinois, Ohio and Missouri will reduce GM's fixed costs by $500 million a year, Chairman Roger Smith said in a long-awaited announcement.
GM and United Auto Workers officials had no estimate of how many workers will lose their jobs, saying it will be months before they know how many workers will be able to transfer to other plants and how many will be retrained for new jobs at GM.
''There's too many unknowns here,'' said Frank Joyce, a UAW spokesman in Detroit.
The closings were part of the first phase of a reorganization and modernization at GM. Other assembly, stamping, engine and component plants are being studied, said GM President James McDonald.
''These actions are absolutely necessary to maintain our marketplace leadership and enhance the job security of the greater bulk of our workforce,'' McDonald said.
GM suffered third-quarter operating losses of about $338 million.
''It's a very constructive move on GM's part. I think as we go forward there will be further closings,'' said industry analyst Gary Glaser of First Boston Corp. in New York.
Glaser said the closings would benefit the U.S. auto industry by helping balance the ratio between capacity and demand.
Wall Street reacted positively to the announcement. GM stock closed at $74.25 on the New York Stock Exchange, up $1.
The 11 plants are older facilities. Most had been scheduled for shutdown for years as GM invested in newer, more efficient plants and renovated others.
Assembly lines at the affected plants were shut down for about an hour Thursday morning so the closings could be explained to workers, most of whom were disappointed but not surprised.
''We naturally regret this decision. We will make absolutely sure that all of our people at every location receive all of the assistance and every negotiated benefit they are entitled to,'' UAW Vice President Donald Ephlin said.
''Over many years of negotiations, we have created a fairly extensive safety net for our people,'' Ephlin said, adding that a UAW-GM task force will be set up to help workers.
Most workers will be eligible for some benefits, which range from training for new jobs and supplemental unemployment benefits to guaranteed income payments for those with more than 10 years' seniority.
About 3,000 of the total affected are salaried employees, McDonald said.
GM has spent about $10 billion building new plants and renovating some old ones to increase efficiency and reduce costs, creating an overlap of capacity and personnel, Smith said.
''A bold strike had to be taken and this was it,'' said David Andrea, a research associate at the University of Michigan's automotive transportation office.
Plants to be closed are:
-The aging Fleetwood body and Clark Street assembly plants in Detroit, with 6,600 workers, to be closed by the end of 1987 when production of Cadillac Brougham, Chevrolet Caprice and Oldsmobile Custom Cruiser wagon will be moved to Arlington, Texas.
-The Flint Body plant and its companion assembly plant in Pontiac, with 4,500 workers making Chevrolets, Buicks and Oldsmobiles, to be closed by the end of 1987 when GM replaces the rear-wheel drive midsize cars with front- wheel drive ones.
-The 4,000-worker Chevrolet-Pontiac-Canada group plant that produces Chevrolet Camaros and Pontiac Firebirds in Norwood, Ohio, near Cincinnati, to be closed in mid-1988 when production is consolidated at a Van Nuys, Calif., plant.
-A 2,200-worker GM Truck & Bus Group plant St. Louis, to be closed by mid- 1987 when production is shifted to other plants in Janesville, Wis., Wentzville, Mo., Bowling Green, Ky., and Fort Wayne, Ind.
-A heavy-duty truck and bus plant in Pontiac, with 2,200 employees, to be closed by August 1988 once GM sells its RTS transit bus business and firms up its joint-venture heavy-duty truck agreement with Volvo.
-Line No. 1 at the Flint Truck and Bus plant, which makes Chevrolet and GMC pickups and employs 3,450 workers, by August 1987.
-Three stamping plants, slated for phase-out by 1990: the 700-worker Conner Street plant in Detroit, which supplies Fleetwood and Clark Street; a 2,500- worker plant in Hamilton, Ohio, and a 2,900-worker Buick-Oldsmobile- Cadillac group plant in Willow Springs, Ill.