Keeping the line open

Cars: Delaware's rescue of its General Motors plant came with a price, but jobs were saved and the campaign is a primer for other states.

June 13, 1999|By Ted Shelsby | Ted Shelsby,SUN STAFF

WILMINGTON, Del. -- At General Motors Corp.'s assembly plant just outside this city, the new midsize Saturns have begun rolling out.

Although production is slow during the start-up phase -- about 30 units a day -- analysts say the new sedans and wagons represent GM's best hope of competing with the Toyota Camry and Honda Accord. Industry sources say the plant could eventually turn out as many as 200,000 vehicles a year.

For Delaware and the Boxwood Road plant's 2,600 workers, the cars have proved a salvation, saving the plant from a death sentence.

It was Dec. 3, 1992, when Thomas J. Davis, then vice president of GM's small-car division, climbed onto a platform in the plant's tire building and told nearly 2,000 first-shift workers that the 52-year-old plant would be closed.

There were no jeers, no heckling, just silence, recalled James Brown, a 50-year-old body shop worker. "Some of the women, some of the men cried. It was like getting hit with a big hammer," he said.

The rescue of the Wilmington plant has a particular resonance about 70 miles to the south, where 3,000 auto workers worry about the future of GM's 63-year-old Broening Highway van assembly plant.

Last summer, as rumors of the Baltimore plant's closing swirled, GM Chairman John F. Smith Jr. committed to keeping it open until the end of next year. Beyond that, its fate is uncertain, and a state task force has been created to try to persuade GM to keep the plant open.

No single factor rescued the Wilmington plant. Rather, it was the convergence of a number of things, among them an improved economy; the sales success of Saturn; a union work force that was among GM's most productive; and an aggressive governor who refused to accept the plant's demise.

And it came with a cost: more than 1,000 high-paying jobs.

It started on Nov. 30, 1992.

Thomas R. Carper was still savoring his lopsided victory to become Delaware's first Democratic governor in 20 years when his wife told him at breakfast that GM might close its Boxwood Road Chevrolet Corsica and Beretta assembly plant.

She had heard the rumors at E. I. du Pont de Nemours in Wilmington, where she served as a division manager. It was the weekend and there was little Carper could do.

Monday morning the governor-elect was on the phone to GM's headquarters in Detroit. He wanted to talk to John G. Smale, who had been chairman at GM only a few weeks, or to Smith, who had taken over as president earlier in the year.

He settled for an opportunity to meet with Davis, the head of GM's small-car division. That evening, along with Gov. Michael Castle, Carper flew to Detroit. The two men met with Davis early the next morning and asked about the plant's future. "For an hour and a half we asked the same question in a variety of ways and for an hour and a half he declined to answer them," Carper recalled in a recent interview.

"When we left, Mike and I looked at each other and I said, `We're in trouble.' "

Loss of the GM plant would have been a staggering blow to this tiny state's economy.

With 3,500 workers, GM was the Delaware's 11th-largest employer, accounting for more than 1 percent of the state's total employment. Its payroll topped $142 million a year.

It was estimated that another 4,000 non-GM jobs would be lost also if the Delaware plant were closed.

Carper was determined not to let this happen.

The first step was to call a meeting of "corporate Delaware." At 7 a.m., the morning after the meeting with Davis, the chief executives of five of the biggest companies in the state gathered at the governor's conference room on the top floor of a state office building in downtown Wilmington.

Their agenda was to figure out ways to save the plant. But GM was already moving.

"The very next day, before we even had a chance to present anything we had worked up, GM announced that they were closing the plant," Carper said. "No ifs, ands or buts. This is it."

GM's decision came at a very difficult time for the nation's No. 1 automaker.

It was about to report a stunning $23.5 billion loss for 1992. Its North American automotive operations hadn't posted a profit since 1989, and its share of the U.S. market was shrinking rapidly.

GM had too much capacity and too many workers, 75,000 too many, according to some analysts.

"It was a period when we were always two weeks away from bankruptcy," said one GM official.

No alternate automaker

In Delaware, the outlook was not promising. Efforts by officials, including U.S. Sen. Joseph R. Biden Jr. and Bob Coy, the state economic development director, to interest Ford, Toyota, Mercedes-Benz, Volkswagen and Audi in taking over the Boxwood factory all came up short.

"Our strategy was twofold," said Darrell Minott, Delaware's current economic development director who was secretary of labor during the GM crisis. "If we couldn't get GM to change its mind, we hoped to find another user for the plant."

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