Idle GM plants spark interest from automakers

Idle GM plants spark interest from automakers http://preview.tinyurl.com/l9ty6p
Prospective buyers eyeing sites considered difficult to unload Robert Snell / The Detroit News
Foreign and domestic automakers have expressed interest in buying factories being sold by the former General Motors Corp. as part of its bankruptcy case.
Al Koch, chief restructuring officer of the old GM, would not disclose the prospective buyers or sites in a recent interview with The Detroit News. But the nibbles illustrate a surprising level of interest in properties -- including a $25 million proposal for 220 acres of land in Flint -- previously thought to be too large, too old and, in some cases, too polluted to sell.
Any completed deals could generate revenue for GM creditors who lost billions when GM filed for bankruptcy, and for communities that are losing tax revenue and jobs as the properties sit idle.
Koch's push to sell the assets left behind when the new General Motors Co. emerged from bankruptcy in July will intensify in mid-September when he plans to meet with members of the Obama administration's auto task force, which is overseeing GM's restructuring.
Koch will talk to the task force about possible uses for the properties and shuttered facilities and about environmental remediation at sites controlled by the old GM -- now known as Motors Liquidation Co.
While Koch would not identify the automakers or the plants being considered, experts say the most logical sites are four GM assembly plants, including Pontiac Assembly, where the factory's 2,800 workers make the Chevrolet Silverado and the GMC Sierra. The plant is supposed to close in October.
The others are located in Wilmington, Del., Shreveport, La., and Moraine, Ohio. The old GM also has five stamping and six powertrain plants.
Industry analysts said any of the assembly plants would give a foreign automaker, perhaps a Chinese or Indian company, entry into the U.S. market or might interest Chrysler Group LLC, which will produce cars made in conjunction with its new partner, Italy's Fiat SpA. A tough sell
But the analysts also cautioned that Chrysler has capacity at existing plants to build new models and there are many reasons why the GM plants will be a tough sell: They are either too old, too large -- in some cases three times the size of the Somerset Collection in Troy -- or located too far from suppliers or in states with union work forces.
"I can't imagine who would want to (buy them)," said auto analyst Jim Hall of 2953 Analytics in Birmingham. "Shreveport is ancient. It doesn't make a lot of sense. Wilmington is relatively old, too. It seems like a risky business for anybody."
Koch concedes it is too soon to know whether the inquiries will lead to sales, and generate cash that could be paid to creditors who are owed billions but likely to receive pennies on the dollar through the bankruptcy process.
"It's not possible, until the process unfolds for a little bit, to tell the shoppers from the buyers," Koch said. "These are very, very large facilities. So the likelihood of finding a single user at any of these industrial sites -- it's not impossible -- but it's a relatively small buyer universe."
There have been at least two or three inquiries made through the government or to old GM directly, Koch said.
"In one case, one user wants to see three of the locations," he said.
The interest also extends to other properties among the 127 being sold, which include 15 factories, a church in rural Indiana, vacant land, homes and landfills. GM would not put an estimated price tag on the real estate. Most of the sites are in Michigan, Ohio and Delaware. In Flint, the developer has pitched a $25 million proposal to create an intermodal transit hub at Buick City, a once-sprawling complex that once employed 28,000.
The possibility of keeping one of the assembly plants open is of critical interest in nearby communities; some want federal stimulus aid to redevelop the sites, which are near major highways, rail lines and in communities that once employed thousands of auto industry workers.
The possibility of buying the land at a fire sale price and the willingness of politicians to offer tax breaks and other development incentives could lure some auto industry companies, said analyst Laurie Harbour-Felax, president of the Harbour-Felax Group in Berkley.
"Maybe Volkswagen or Audi or somebody like that," she said, "if they're looking to have a facility here and if they can get it for a song. We're a low-cost country now, to some degree. The amount of money being poured into the economy and the way inflation will change and the way the dollar will ultimately go down, it will only be more competitive to produce vehicles here." Some successes
Even if buyers can be found, the assembly plants may be too large for a single user and demolition and environmental cleanup costs can be prohibitively expensive. The federal government has pledged more than $60 million in federal aid to help cover some of those costs.
There have been some successes, however.
Earlier this summer, Nelson Ventures Inc. unveiled plans for a $54 million film production studio in GM's Centerpoint complex in Pontiac. And in 2007, before GM went bankrupt, the automaker sold a 100-acre property that was home to an assembly plant in Linden, N.J., to an investment trust for $77 million. The site is being redeveloped for industrial and retail uses.
Unnamed investors have toured the 4.4 million-square-foot Moraine plant in suburban Dayton several times in recent months, said Mike Davis, the city's economic development director. The sport utility vehicle plant, which employed about 1,080 hourly workers, closed in December.
"They were interested in subdividing it for anything from logistics and automotive-type uses, not as a pure assembly plant," Davis said. "It could be divided up, parts of it may be demolished or parts rehabilitated."
Davis also has expressed interest in pursuing $50 million in federal stimulus funding to redevelop the 300-acre site.
Koch said there have been offers from governors and members of Congress, representing states where GM has facilities to help pursue economic incentives to redevelop some of the sites.
"So," Koch said, "it's not really a question of us knocking on doors asking 'would it be possible to get help?'"
--
Civis Romanus Sum

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Hey, GM should sell them so they can pay their bills for a change.
Then the new owners can start up some operation that makes money, pays taxes and employs people without the drag on society.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Motorsforum.com is a website by car enthusiasts for car enthusiasts. It is not affiliated with any of the car or spare part manufacturers or car dealers discussed here. All logos and trade names are the property of their respective owners.