New deal, new layoffs for GM
A labor contract that provided unprecedented promises to keep work
flowing at General Motors Corp. factories nationwide wasn't enough to
protect hundreds of Michigan autoworkers from the harsh reality of the
U.S. auto market.
Within weeks of reaching a new labor pact with the United Auto Workers,
GM announced layoffs at three factories, which soon will add more than
2,000 autoworkers to the ranks of Michigan's unemployed.
GM said the timing of the layoffs -- in Flint, Pontiac and Hamtramck --
was driven solely by demand for vehicles produced at the plants and
wasn't at all related to the labor contract ratified Sept. 10.
Still, the announcements come as UAW workers at Chrysler LLC are in the
final days of voting on their own contract, with job security emerging
as the central issue in a close ratification vote.
Chrysler workers are watching warily as events unfold across town.
"If it could happen to them, you know it could happen to us," said Dean
DeMarco, a worker at Chrysler's Trenton Engine manufacturing facility
who said the GM job cuts caused him to think twice about voting last
week in favor of tentative agreement
GM's decision to announce layoffs so shortly after striking a landmark,
money-saving labor agreement with the UAW is a stark reminder that no
job is guaranteed anymore in the volatile U.S. auto industry.
The layoffs include 1,000 workers at the GM assembly plant in Delta
Township near Lansing, 767 workers at a Hamtramck plant that builds
high-end sedans and up to 900 workers at a truck plant in Pontiac. At
least 180 of those getting laid off are former temporary workers in
Hamtramck who had just received full-time status and wages under the
"A lot of us are skeptical about how all this went down," said Mike
Crawford, who works at the Hamtramck plant. "A lot of temps and people
who voted for this contract did it on the basis that their kids and
families would have jobs. Then, as soon as we ratify the contract, they
put them on the streets."
GM sales down 6.6 percent
The cuts were a necessary part of the automaker's strategy to keep
vehicle production in line with demand, GM spokesman Tom Wickham said.
In rolling out details of the deal to Wall Street last week, GM Chief
Financial Officer Fritz Henderson reassured investors that the agreement
gives GM the flexibility it needs to adjust staffing levels to the
shifting market. In the past, GM has overproduced cars and trucks to
keep plants running, a strategy that ultimately contributed to the glut
of vehicles being sold at deep discounts and into rental fleets. The
recent cuts, GM says, will prevent that scenario.
Sales are down for a number of automakers in the United States this
year; for GM, overall sales are down 6.6 percent through September.
The Hamtramck plant builds the Cadillac DTS and Buick Lucerne sedan,
whose sales have fallen 14 percent and 15 percent, respectively, this year.
Pontiac builds mostly heavy-duty versions of the Chevrolet Silverado and
GMC Sierra pickup trucks. Reflecting sluggish U.S. truck sales hit hard
by the national housing slump, GM's pickup sales are down 2 percent
through September -- even with the well-received makeovers of the Sierra
In Lansing, Wickham said, the third shift that's being cut was put in
place only to meet initial demand for the launch of GM's trio of popular
new crossover SUVs. About 500 of the 1,000 workers being laid off there
were temporary hires brought on to help with the rollout. The vehicles
continue to sell well, though not enough to support three full shifts.
Making poor economy worse
The cuts aren't good news for Michigan, which has lost nearly 120,000
manufacturing jobs since 2001. But the GM layoffs aren't so big that
they'll make a significant impact in the states spiraling economy.
"Unfortunately, in the current Michigan economy, 2,000 jobs isn't that
significant," said Scott Watkins, a consultant with Anderson Economic
Group in East Lansing. "It's certainly making a poor economy even worse
off. But it's not the straw that's making a decent economy bad."