Car-Transport Tom Landwehr of Murfreesboro, Tenn., loads new 2009 Chevrolet Traverse vehicles at the General Motors Spring Hill Manufacturing Plant in Spring Hill. (AP Photo/Bill Waugh)

Other U.S. facilities to shut down for as long as 11 weeks

By CHRIS GRAHAM and SAMANTHA BALLARD/Staff Writers

The Spring Hill General Motors Manufacturing plant, which produces the Chevrolet Traverse, will see three additional weeks of downtime this summer, the company announced Thursday.

Some plants will be closed for more than two months.

“We’re very pleased it was only three weeks,” said Mike Herron, United Auto Workers Local 1853 bargaining chairman.
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The factory is among 13 plants that will be shut down this summer as the automaker tries to stave off bankruptcy. Under this plan, about 190,000 vehicles will be removed from GM’s North American production schedule in the second and early third quarter this year.

Herron said Spring Hill’s general assembly factory and the body plant will be shut down from June 8-22, while other parts of the manufacturing plant will remain open, including the section that produces engines. This production shutdown is in addition to a traditional two-week summer closure when GM plants switch over to next year’s models.

Herron said about 2,000 local employees will be affected by the decision. While on temporary layoff, hourly employees will receive pay from the company in addition to state unemployment benefits, which will be 70 percent of their normal weekly pay.

Herron said the Traverse’s selling ability played a huge role in the plant being spared a more protracted shutdown. According to Automotive News, as of April 1, GM had a 73-day inventory of Traverse vehicles.

Other plants, such as the ones in Ft. Wayne, Ind., and Flint, Mich. that produce the Chevrolet Silverado and GMC Sierra, will be shut down as many as 11 weeks. Compared to the Traverse, GM had a 139-day supply of Silverados and 158-day supply of Sierras.

Herron said workers were on edge Thursday morning, but the announcement was a welcome one.

HEIGHTENED

CONCERNS

On Wednesday, The Associated Press reported based on anonymous sources that most U.S. factories could be closed for up to nine weeks.

Prior to Thursday’s official announcement, officials said a lengthy shuttering of the Spring GM plant could have severe ramifications for Maury County.

Maury Alliance Director Frank Tamberrino said about 1,200 jobs are tied to three major local suppliers of the Spring Hill factory — Johnson Controls, Penske Logistics and Premier Manufacturing. A nine-week shutdown of Spring Hill plant could have spelled mass layoffs at numerous businesses.

“People not only in this county but surrounding counties understand the economic importance of GM,” Tamberrino said.

As of Thursday afternoon, Penske spokesman Randy Ryerson said he was preparing a statement regarding the plant’s closure.

Calls made to the other companies were not returned Thursday.

The Spring Hill plant was built in the 1980s to produce GM’s Saturn brand. In 2007, the plant underwent major retooling to build new products after production of Saturn vehicles was moved to other GM factories. Since then, the plant has shed thousands of jobs and now employs about 3,200 workers.

“It’s still a big economic player,” Tamberrino said.

Brief layoffs have a major effect on the county unemployment rates. In March, the county recorded a 4 percent spike in the unemployment rate from 11.6 percent to 15.6.

County Mayor Jim Bailey said he thinks the county can “absorb” a temporary shuttering of the plant, but that a permanent plant closing would be catastrophic. The mayor said the corporation pays $2.3 million annually to the county in lieu of taxes.

“The loss of the plant is the main concern,” he said. “We want to make sure that plant is up and viable.”

Eddie Hickman, director of Maury County Public Schools, said he thinks even a temporary shutdown could result in lower enrollments for the district. He said a permanent shutdown would drastically lower enrollment and curtail tax revenue the district needs to operate.

Newly-elected Spring Hill Mayor Michael Dinwiddie said the whole region is dependent on the plant. He said the uncertain status of one of Maury County’s largest employers is on “everybody’s mind.”

“Everybody’s praying and keeping their fingers crossed for the plant,” he said. “We’re all in this together.”

DOMINO EFFECT

Analysts said Thursday the fate of the region’s suppliers and other associated businesses now will depend on whether GM files for Chapter 11 bankruptcy.

Jim Gillette, director of financial operations at auto-industry consultant CSM Worldwide in Grand Rapids, Mich., said suppliers across North America are fearful of an increasing probability that both GM and Chrysler will declare bankruptcy.

“Suppliers all over are going to suffer from this. … It’s a dire situation,” he said. “Even if they (suppliers) do survive, we could see a lot of layoffs, and some of them may be permanent.”

The retooling of the plant lasted more than a year. Nine local auto parts suppliers or service providers laid off about 900 workers during that time.

Gillette said Chrysler and GM have each received hundreds of applications from suppliers seeking to participate in a government program set-up to pay suppliers for parts they have made for manufacturers. If both companies were to go under, suppliers may be out of luck, Gillette said.

“Everybody is looking at everybody else, and they’re asking who’s next,” he said.

Brett Smith, assistant director of research at the Center for Automobile Research in Ann Arbor, Mich., said if GM or Chrysler were to hit rock bottom, it could spell disaster for others who are contracted to supply parts to them.

“It would force an enormous amount of suppliers into bankruptcy,” he said.

CLOSED FOR GOOD?

Smith said it would make sense for GM to shut down the Spring Hill plant and start producing the Traverse at the company’s Lansing Delta Township assembly plant. That plant was one of the GM factories not seeing added downtime this summer.

Smith said a temporary shutdown of the Spring Hill plant could eventually mean the end of GM’s presence in Maury County.

“It’s not certain there will be business next week let alone for the next 10 weeks,” he said. “It’s possible that they shut down and never reopen.”

Even if GM were to leave Maury County, Sen. Bill Ketron said he believes the plant would eventually be occupied by another manufacturer.

But Tamberrino said he doesn’t see GM abandoning the Spring Hill plant anytime soon.

“GM is too big to go away,” he said. “I see them remaining there. It just does not make sense that this plant wouldn’t be a part of the mix.”

Staff Writer Skyler Swisher contributed to this report

Story created Apr 24, 2009 – 11:32:56 EDT.