GM to hasten factory closings

Wis. plant, Grand Rapids affected


General Motors announced Monday that it will idle its Janesville, Wis., SUV factory on Dec. 23.
(2005 photo by Janesville Gazette via AP)

General Motors Corp. announced Monday that it will close its Grand Rapids stamping plant in December 2009 and accelerate the closing of its Janesville, Wis., assembly plant by more than a year to Dec. 23 of this year.

The plant closing announcements come just a little more than a week after the automaker said it would advance the closure of its Moraine, Ohio, assembly plant.

All three plants make parts for or assemble large and midsize trucks, which have seen particularly large drop-offs in sales this year with the worsening economy and high gas prices.

Monday’s announcements are part of GM’s plans to accelerate plant actions to save money in the face of the worst auto market in more than a decade.

GM has not said whether it will close other plants early or announce new closure actions.

GM started the day Monday by telling 1,300 workers in Janesville that it would close the plant Dec. 23, more than a year before the company had planned.

The Janesville plant assembles the GMC Yukon, Chevrolet Tahoe and Chevrolet Suburban, all large SUVs.

Monday afternoon, GM officials informed its 1,520 Grand Rapids stamping employees that it plans to end production at that plant in December 2009.

More than 40% of the parts produced in Grand Rapids are for large pickups and SUVs and midsize SUVs.

“There’s shrinking supply, so less demand for their parts,” said GM spokesman Chris Lee.

In addition, he said, Grand Rapids is not as convenient a location as some of GM’s other stamping locations.

“The company is moving toward a lean, regional, contiguous footprint, reducing pipeline inventories, shipping costs and container investment,” Lee said.

Lee would not comment about potential future plant closure announcements, other than to say that the company “continues to assess our stamping capacity.”

In June, GM announced plans to end production at three assembly plants — Moraine, Janesville and Oshawa, Ontario — in 2010 and end production of a truck line in Toluca, Mexico, as part of a plan to adjust to a rapid shift in the U.S. automotive consumer preferences away from trucks to cars and crossovers in light of gas prices that reached about $4 per gallon.

By mid-July, however with gas prices remaining high, vehicle sales worsening and heightened concerns that GM would not have enough cash to survive until 2010, GM announced a plan to cut $10 billion in costs and raise an additional $5 billion through borrowing and asset sales, including the potential sale of the Hummer SUV brand.

As the global economic turmoil has worsened and stock markets have dropped to historic prices, GM said it would accelerate its plans, including plant closings.

GM Chairman and CEO Rick Wagoner has said the company is considering the idling of stamping, powertrain and other support plants as part of its actions.

Contact KATIE MERX at 313-222-8762 or kmerx@freepress.com.

BY KATIE MERX • FREE PRESS BUSINESS WRITER • October 14, 2008

Source: Detroit Free Press

Leave a Comment