UPDATE: GM: 14 Plants, 3 Parts Centers To Close By 2011
02 June 2009 - 2:07AM
Dow Jones News
General Motors Corp. (GM), coinciding with its bankruptcy filing
Monday, said it will shutter 17 factories and parts centers by the
end of 2011. It will also cut an additional 5,000 salaried
jobs.
The closures will reduce GM's U.S. facilities to 33 from 47 by
2012. Between 18,000 and 20,000 workers will be affected by the
shutdowns, General Motors North America Manufacturing Vice
President Tim Lee said during a conference call Monday. Employment
reduction will be done according to terms in the United Auto
Workers agreement.
The closures are expected to result in lower fixed costs per
vehicle sold and more efficient capital investment. Plant
efficiency is expected to jump with the reduction of the assembly
plant count, Lee said.
Seven factories in Michigan and plants in Ohio, Indiana and
Tennessee will be closed, the auto maker said in a statement. Two
of the closures had been previously announced, including a castings
factory in Massena, N.Y., which closed May 1.
Three of the facilities to close are parts centers and three
factories could reopen if market demand rebounds.
The move was expected after GM cut a deal last month with the
UAW as parts of its effort to smooth the company's path through
bankruptcy.
Assembly plants targeted for closure are in Orion and Pontiac,
Mich; Spring Hill, Tenn., and Wilmington, Del. Stamping plants in
Grand Rapids and Pontiac, Mich.; Indianapolis, Ind.; and Mansfield,
Ohio, will close. Powertrain factories in Livonia, Flint and Willow
Run, Mich.; and Parma, Ohio, will close.
Lee said the company is still deciding where it will build its
new small car announced last month. The contenders include the
Orion, Mich.; Spring Hill, Tenn.; and Janesville, Wis. plants.
The re-tooled plant will be capable of building 160,000 cars
annually and manufacture a combination of both small and compact
vehicles.
"I would advocate that we make the decison quickly," Lee
said.
The future of GM's Hummer production plant in Shreveport, La.,
hasn't yet been decided. GM intends to either end or sell off the
brand. Production of GM's Traverse will be moved from Spring Hill
to its Lansing, Mich., plant.
GM's service and parts division also announced it will cease
operations and distribution centers in Boston; Columbus, Ohio; and
Jacksonville, Fla. by Dec. 31, 2009.
-By Sharon Terlep; Dow Jones Newswires;
sharon.terlep@dowjones.com