June 06, 2001|By Ted Shelsby | Ted Shelsby,SUN STAFF
WILMINGTON, Del. - The president and chief executive of General Motors Corp. hinted - but stopped short of saying - yesterday that the company's big investment in the Allison Transmission plant in White Marsh is designed to offset the closing of the van assembly plant in Baltimore,
"We did make the major investment in the Allison Transmission plant to focus specifically to providing opportunities for a long-standing GM work force" in Baltimore, G. Richard Wagoner Jr. replied to a question at a news conference after the annual stockholders meeting here.
The company's official position is that the Baltimore plant, which produces the Chevrolet Astro and GMC Safari vans, will remain open at least until the third quarter of 2003. After that, GM says, the market will determine the future for the vans.
Although sales of the Astro and Safari vans were down nearly 40 percent during the first quarter compared with last year's first quarter, Wagoner said that, under current market circumstances, the vans are selling better than some GM officials expected.
State economic development officials responded differently to Wagoner's comments about the Allison plant, which moved into full-scale production this year.
Ioanna T. Morfessis, president of the Greater Baltimore Alliance, said that she did not want to second-guess GM's chief executive, but that it appeared to her the Allison plant "is to provide a platform for the transition of the workers at the Broening Highway plant to another job."
"I feel strongly," she added, "that the Allison Transmission plant was put here specifically to offset the closing of a plant that is building an extinct species. It is better to have something, than nothing."
Jacqui Lampell, a spokeswoman for the state Department of Business and Economic Development, said there was nothing new in Wagoner's comments from what GM officials have been saying all along.
The Astro and Safari were introduced in 1984 after GM invested more than $270 million to renovate its aged Baltimore assembly plant. As part of the renovation, GM reduced the number of workers at the plant to about 3,500 from 6,700. Today, employment is about 1,500.
GM has invested $216 million in the White Marsh transmission plant. It employs 350 workers, most transferred from the van assembly plant.
Industry officials say sales of the vans have suffered in recent years from never having undergone a major face lift to keep pace with their competitors.
"It's long on the tooth," said David E. Cole, executive director of the Center for Automotive Research in Ann Arbor, Mich.
Despite this, George E. Hoffer, an auto industry analyst and professor of economics at Virginia Commonwealth University, called the Baltimore vans "survivors" and said they would fare even better with more advertising support from GM.
In other developments at the stockholders meeting, Wagoner said 2000 was a solid year for GM, with record revenue of $185 billion and a near-record profit of $8.58 a share.
"We also had some disappointment in 2000, including unacceptable financial losses at GM Europe and Asia-Pacific," he said.
To correct these problems, he said, European capacity will be reduced by more than 20 percent by 2004, including the closing of a car assembly plant in Luton, England.
Investors rejected a proposal that GM be required to obtain shareholders' approval before adopting a poison pill to discourage an unwanted takeover or business combination. The proposal, however, won 42.2 percent of the vote.
John Chevedden, sponsor of the proposal, accused GM of soliciting stockholders to vote against the measure. Thomas A. Gottschalk, the company general counsel, denied sending a letter to stockholders but admitted that the company made phone calls to some institutional investors.
Members of the Korean Metal Workers Federation voiced concerns and handed out letters warning that a GM takeover of Daewoo Motor Co. could result in a national auto workers' strike in South Korea.
