GM plants compete in order to survive impending cutbacks Politicians, UAW consider concessions

January 05, 1992|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau of The Sun

Washington -- Arlington, in the Sunbelt sprawl of Texas, and Ypsilanti, in the industrial Rust Bowl of Michigan, are locked in a long-distance, life-or-death economic struggle.

One of the localities faces the prospect of losing its major private employer, General Motors Corp., as the nation's largest automaker prepares to close 21 plants and shed more than 70,000 workers in the United States and Canada by 1995.

General Motors has been deliberately vague over which of its 125 continental assembly and parts plants will be axed under a massive restructuring announced in mid-December. That has cast a pall of uncertainty over automaking cities throughout the nation and unleashed a cross-country battle for survival. The weapons: tax breaks, union concessions and relaxed government regulations.

"Everybody in every town where there is a GM plant now starts worrying about how they can be . . . competitive," said James A. Mateyka, vice president of the automotive consulting practice of Booz-Allen and Hamilton in Bethesda. "At this point, it becomes a kind of battle among the assembly plants as to who has the best quality, who has the best programs, who has the most effective management."

Nowhere is this truer than in Arlington and Ypsilanti. Despite the general vagueness of the down-sizing blueprint, GM Chairman and Chief Executive Officer Robert C. Stempel specifically tagged production at these two plants for consolidation. Each makes large rear-wheel-drive Chevrolets and Buicks, for which demand is limited.

But Mr. Stempel did not say which plant will survive.

The result: a battle on economic, political and social fronts.

In Ypsilanti, Michigan state Representative Kirk Profit is spearheading the save-our-plant drive. He has organized a meeting with Michigan congressional representatives on Jan. 10 make sure all the players are there to perform" and has slated an emergency community meeting Jan. 13 "to make sure GM knows that the local community is ready to produce."

He wants property taxes lowered, job-training programs strengthened, the road network improved.

"I want to make sure the consolidation happens here," he said of the 3,500-worker plant. "It is like any competition. There is a certain nervousness, but that nervousness is important in making sure you keep a competitive edge. The competition brings out the best in all of us, the local community, the labor team, the management team and state and federal representatives."

Ypsilanti boosters point to the area's tradition as "Auto Capital of the World," its proximity to Detroit-based GM's major suppliers, its ability to produce cheaper autos than Arlington and the plant's recent re-tooling.

"I am really comfortable with the competitive advantage we have. The plant wasn't put here for some pie-in-the-sky reason. It was put here because this is a good place to build cars," said Mr. Profit.

Tell that to Arlington Mayor Richard Greene, who convened a New Year's Eve town council meeting to offer tax abatements worth up to $11 million on any extension GM builds to consolidate the two production lines.

"To whatever extent it would help, we are willing to do it," said the mayor, noting that the 3,800-worker GM plant generated a payroll of $175 million.

The United Auto Workers union at the plant quickly voted to reopen its contract with GM and is ready to consider job-saving concessions, despite a warning from the UAW International. The UAW International, trying to avoid siding with either of the competing localities, said that any major contract changes would require -- and were unlikely to get -- its approval.

"Certainly we are not considering, at this point, reopening our national agreement," said Reg McGee, UAW International spokesman in Detroit.

Texas Gov. Ann W. Richards dispatched officials from the state Department of Commerce to Arlington in the wake of GM's cutback announcement. They were instructed to find out from local corporate executives what the state could do to secure Arlington's future.

Under consideration: easing workers' compensation and trucking regulations, increasing job training and introducing enterprise-zone legislation.

"What we would like to do . . . is be able to offer to the [GM] plant some sort of relief of local and state taxes and costs that would have the net effect of reducing the unit price of an automobile rolling out of the Arlington plant," Mr. Greene said.

The anxiety has even spread north of the U.S. border into Ontario, Canada, where the GM plant in Oshawa faces competition from assembly plants in North Tarrytown, N.Y., Fort Wayne, Ind., Janesville, Wis., and Pontiac, Mich, for production of Chevrolet Luminas and full-size Chevy and GMC pickups.

Provincial Premier Bob Rae plans to meet local GM executives "to work out the best possible proposals" to put to corporate headquarters in Detroit to ensure the Oshawa plant's survival.

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