GM to lay off about 950 at plant in Linden, N.J.

SUV decision comes 13 days after news of Baltimore closure

December 01, 2004|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

General Motors Corp. said yesterday that it will lay off almost all of its 1,000 workers at an assembly plant in New Jersey early next year, news that comes on the heels of its announcement that it will close its van plant in Baltimore.

The Linden, N.J., plant was the only one that produced the Chevrolet Blazer and GMC Jimmy, sport utility vehicles that GM introduced almost a decade ago and does not plan to continue making.

Baltimore's Broening Highway factory makes the Chevrolet Astro and GMC Safari vans, which date back 20 years and are also being phased out.

The news reflects the continued pressure on U.S. carmakers to squeeze out efficiencies in an increasingly competitive market.

Plants like those in Linden and Baltimore - older ones churning out vehicles with older designs that fewer people want to buy - have become expendable, industry experts said. Worldwide, auto manufacturers are making more than they're selling.

"The industry has too much capacity," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. Baltimore and Linden "both have had the penalty of being outside sort of the main corridor of manufacturing and supply, and that makes them vulnerable."

GM announced last month that it would close its 69-year- old plant in Southeast Baltimore, which has about 1,100 employees, next year. Workers knew it was only a matter of time because the most recent contract negotiated with the United Auto Workers union - which runs until September 2007 - took Baltimore off the list of plants that would not be closed.

Linden's plant was on the protected list, and GM is not "categorizing" its layoffs there as a plant closing, company spokesman Dan Flores said yesterday. The plant will continue operating but won't produce anything.

"There will be people in the plant maintaining the plant," he said.

Of 1,000 hourly workers at Linden, GM will let go about 950, Flores said. The company will try to find work elsewhere for the 110 salaried employees, Flores said.

GM had planned to produce the two sport utility models in Linden through next summer, but sales have been slower than expected. The company sold 31,271 Blazers in the United States during the first 10 months of this year, 28 percent fewer than in the corresponding period a year earlier. It hasn't sold any Jimmys here; about 1,400 were sold in Canada.

"The demand for the Blazer and the Jimmy have continued to soften over the last several years," Flores said. "Really, it's the driving force behind this need to notify employees of the pending layoff."

Cole said it's possible that the plant could be assigned a new product rather than be closed in 2007. "But it certainly doesn't look good when you've got an old plant ... and it's outside the main supply chain," he said.

Bruce Belzowski, assistant research scientist at the University of Michigan's Office for the Study of Automotive Transportation, said workers usually know well ahead of time when their plant is in danger of being closed. "Their job is to try to convince the manufacturers to give them new product, that their plant is competitive," he said. "Sometimes that works. Sometimes it doesn't."

When it doesn't, the community suffers along with the auto workers. Every auto manufacturing job makes 9.4 other jobs possible, from suppliers to restaurateurs, Cole said.

Bloomberg News contributed to this article.

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