The Finch Formerly Known As Gold

21 November 2005

It's official

General Motors will shutter nine North American auto plants, including Oklahoma City Assembly.

The full GM announcement is here.

Robert Farago noted last week at The Truth About Cars:

[CEO Rick] Wagoner vows to cut 25k hourly employees by '08. Only GMís contract with the UAW prohibits plant closures until September 2007. And that means Wagoner actually intends to "idle" the excess workers, or try to lure them into early retirement. Either way, the employees will be almost as big a drain on GMís resources as if they were building cars no one wants.

The actual cut appears to be 30,000, but Farago is correct. From the GM announcement:

Given the demographics of GM's workforce, the company plans to achieve much of the job reduction via attrition and early retirement programs. GM will work with the leadership of its unions, as any early retirement program would need to be mutually agreed upon. GM hopes to reach an agreement on such a plan as soon as possible.

Translation: Do not expect 2500 Oklahoma City auto workers out on the street this spring.

Update, 8:50 am: WWMTD? If Mark Tapscott were running GM:

I would leak a draft of a bankruptcy filing, then when the media frenzy is well underway pick up the telephone and tell the UAW leadership they will determine whether the papers are filed or not.

Now that sounds like a plan.

Update, 12 noon: Can a buyer be found for the plant? Maybe. Certainly neither Ford nor DaimlerChrysler needs any more plant capacity, but I can imagine Nissan (which is relocating its US headquarters to Tennessee) or the Hyundai-Kia combine looking over the possibilities.

Update, 6:30 pm: J. M. Branum calls for a job action:

Personally I think the UAW needs to get off its butt and take some action with a real strike. Every GM worker nationwide should be walking off the assembly lines right now and refuse to let scabs into the plants, while at the same time consumers would straight up refuse to buy GM products. If this happened on a mass scale, I think GM would have to back down, but unfortunately I don't think this is going to happen. Because folks aren't willing to stick together (and I donít just mean autoworkers, but in other professions too), the Man is able to screw the workers.

Here's the United Auto Workers statement on the closings.

Update, 8 am, 22 November: Mayor Cornett keeps a stiff upper lip:

On the plus side, we have a lot of interest in Oklahoma City in general. We're always looking at our inventory, what we have to offer to corporate America. Being able to offer this plant at that location, on the interstate and next to Tinker, is very inviting. It also opens up a very qualified work force for someone else to come in and create some jobs.

And the one thing we learned from the Hornets deal is that Cornett can move in a hurry when an opportunity presents itself.

Posted at 7:55 AM to City Scene

TrackBack: 11:18 AM, 21 November 2005
» Stormy Monday from Harleys, Cars, Girls
GM announced that it is cutting 30,000 jobs and closing 9 plants. $4 billion in losses this year. Ouch! The New York Times runs a story on how this will impact workers and retirees. Another of the old job-for-life industries...[read more]

For GM to allude that they are even considering bankruptcy would only add to its troubles. Potential car buyers don't look favorably to auto companies that may go bankrupt.

Posted by: MikeH at 11:27 AM on 21 November 2005

Auto columnist Jerry Flint has said outright that the UAW is stronger than GM right now, and assuming that GM is aware of the imbalance, the company's not likely to stir that particular pot.

Posted by: CGHill at 11:47 AM on 21 November 2005

Delphi attempts to see GM's bet ..

"GM parts supplier Delphi plans to axe 24,000 jobs: reduce hourly wage from $27 to $9; pay managers bonuses worth $90m"

Read it here

Posted by: Mel at 3:03 PM on 21 November 2005

Well, I think that people are finally getting smart. Buyers see the "big" picture. We are continually losing jobs to "cheaper labor", so let GM and others sell their cars elsewhere. Where the parts and components are assembled. Once again the foreign car manufacturers' have beat them (GM), on their home field. What a shame to keep raising the salaries of "managers", while cutting the hours and pay of others. You made your bed. Now sleep in it.

Posted by: JoelC at 4:51 PM on 21 November 2005

Is this where I mention that my car, despite its Japanese nameplate, was built in a UAW plant in Michigan?

Posted by: CGHill at 6:20 PM on 21 November 2005

I personally think they've priced themselves out of the market. I mean mid $20,000's for a vehicle is a lot more than someone earning $9. an hour an afford. And that is only a few of their vehicles! The rest are $30,000 and $40,000 and even more! It's ridiculous. Especially when they still lose half of their value in five years

Posted by: ms7168 at 8:24 PM on 21 November 2005