Plants top list of likely closings

3 GM

Automaker also might pull plug on 4 other factories, experts say

November 12, 2005|By DETROIT FREE PRESS

DETROIT -- Plants in Michigan, Wisconsin and Georgia are among those that independent auto industry analysts say are the most likely to be targeted for closing when General Motors Corp. announces its next cost-cutting plan by the end of the year.

The three, in Lansing, Mich., Doraville, Ga., and Janesville, Wis., top the list of experts polled by the Free Press.

Also thought to be endangered are two plants in Michigan, one in Oklahoma City and a Saturn plant in Spring Hill, Tenn.

Many in the auto industry have been poring over cost and production data, trying to figure out since June which plants GM might close.

That was when Chairman and Chief Executive Officer Rick Wagoner said he would eliminate an additional 25,000 blue-collar jobs over the next three years as part of his plan to cut costs and return the company to profitability.

`Many factors'

"Only GM ultimately knows what facilities they're going to close," said Catherine Madden, who forecasts car and truck production for Global Insight of Lexington, Mass. "Obviously, there are many factors that can weigh on a facility being closed."

The age of the plant, the number of models it can make, its proximity to suppliers, access to highways and railroads and the company's relationship with local union leaders all play a part in the decision, she said.

Last month, Wagoner indicated that the automaker was getting close to deciding which plants would be closed.

"Over the past four months, we have done a lot of detailed work on this and have at this point a reasonably clear sight of our overall manufacturing restructuring plan," Wagoner said Oct. 17, when he announced that the automaker had lost $1.6 billion in the third quarter, bringing the company's losses for the year to $3.8 billion.

GM spokesman Stefan Weinmann declined to comment yesterday on the plan for closing plants. "Many factors go into the decision. It's a highly complex process," he said.

GM's goal is to bring its manufacturing capacity more into line with its sales.

Its factories in the United States, Mexico and Canada can build many more cars and trucks than customers are buying. Maintaining excess capacity is wasteful and a significant reason for GM's losses.

Baltimore plant

This year, GM has closed or stopped production at three assembly plants that were capable of building 1 million vehicles, including a van plant in Baltimore.

The others were the Lansing C car plant in Michigan and an SUV plant in Linden, N.J.

Despite that, GM plants are running at about 79 percent of capacity, said Madden, the Global Insight analyst.

Wagoner said in October that GM's goal is to close enough plants to consistently use 100 percent of its capacity.

Other industry experts the Free Press contacted work for consulting companies and forecasting firms that do business with GM. To protect their work with the automaker, they requested anonymity.

The Lansing Craft Centre, where GM builds the Chevrolet SSR, topped many experts' list of plants most likely to be closed.

The convertible sport pickup has been a hit at auto shows, but not at dealerships, and unsold vehicles have piled up. GM will have idled the plant for nearly 30 weeks this year.

The Craft Centre is GM's smallest U.S. vehicle assembly plant, employing 330 members of the United Auto Workers union and 60 salaried employees.

The two other plants considered mostly likely to be closed are the Doraville, Ga., plant, which builds GM's minivans, and a full-size SUV plant in Janesville, Wis., industry experts said.

With fewer plants making cars and trucks, GM also might need fewer plants that stamp out metal parts or build engines and transmissions, the experts said.

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