Gm Shutdown

White Marsh Transmission Plant To Close 4-8 Weeks

April 24, 2009|By Andrea K. Walker | Andrea K. Walker,andrea.walker@baltsun.com

General Motors said Thursday that it will temporarily shut down operations at 13 assembly plants in North America, including several served by the Powertrain Baltimore Transmission Plant in White Marsh, for as long as 13 weeks this summer.

The shutdowns mean the White Marsh plant will have to close for four to eight weeks, possibly beginning in May, said John Raut, a spokesman for the plant.

The company is examining vehicle orders at the assembly plants it serves to determine the impact on the local plant.

"It will definitely affect us, we just don't know when," Raut said.

The closures at the 13 assembly plants will be staggered and vary in duration based on inventory levels and expected demand for products. Plants manufacturing new products, such as the Camaro being built in Canada, will not be closed.

The White Marsh facility provides parts for plants in Arlington, Texas; Flint and Pontiac, Mich.; and Silao, Mexico - all of which are slated to temporarily close. These plants are some of the hardest-hit by the closures. The Arlington and Flint plants will close for 10 weeks, the Pontiac plant for eight weeks and the Silao plant for nine weeks.

The closures include a traditional summer shutdown of two weeks that occurs at GM's U.S. and Canadian plants every year.

White Marsh has about 200 hourly and 40 salaried employees. They were told yesterday about the shutdown.

Hourly workers will get unemployment benefits and supplemental pay while laid off, Troy Clarke, GM president for North America, said during a conference call Thursday. Salaried workers will also get some pay.

The closures will start in May and end in July. During that time the company plans to cut production by 190,000 vehicles. GM's sales fell nearly 49 percent through March, compared with a year earlier. Dealers had about 767,000 GM vehicles in stock at the end of March.

GM said the shutdowns will help control high inventory levels at dealerships and bring production in line with sales. It is the largest shutdown of plants in recent history, Clarke said. The company has 22 assembly plants in North America.

Clarke said in a conference call that the closures don't indicate that the company was ready to declare bankruptcy. GM faces bankruptcy if it doesn't take several steps to implement a restructuring plan, ordered by the federal government, that includes significantly reducing costs. GM has borrowed $13.4 billion from the federal government since December.

"There is an issue with having inventory - in most businesses - in line with where consumer demand is at the time," Clarke said during the call.

The automaker has until June 1 to restructure its debt and win union concessions. GM announced Monday the elimination of 1,600 salaried jobs as part of a worldwide work force reduction. Last month, it said 7,500 workers, including about 30 in the Baltimore area, had signed up to take buyouts or early retirements.

Clarke would not say how many workers would get laid off or comment on whether any of the plants would shut down for good.

The production cuts will reduce second-quarter earnings before certain expenses by about $1.2 billion, Brian Johnson, an analyst with Barclays Capital, said in a note to clients. He based his prediction on an average margin of $5,000 for cars and $8,000 for trucks.

"These are tough decisions, but we are moving faster and deeper as we strive to restructure General Motors," Clarke said.

Bloomberg News contributed to this article.

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