Doraville on GM's hit list
Last vehicle likely to roll off assembly line in '08
From the Atlanta Journal-Constitution
By MIKE TIERNEY
The Atlanta Journal-Constitution
Published on: 11/22/05
Let the death watch begin
The venerable General Motors plant in Doraville, which has provided transportation to millions of Americans and jobs to thousands of metro Atlantans, was included Monday on the company's hit list to shed 30,000 jobs.
Doraville's 3,000 active employees, sweating out months of uncertainty about their livelihood, got one question cleared up with the announcement.
But the fate of their own contracts and pay and GM's potential for bankruptcy — even with the curtain falling on their work — remains a mystery.
GM on Monday pinpointed the 58-year-old plant's end of the road at 2008, but the last vehicle could roll off later — or earlier — depending on when the company chooses to end the production life cycle of four minivans manufactured there.
"It's market-driven," said Doraville GM spokesman Michael Merrick, noting that the company periodically evaluates actual and projected sales. "It could be longer or shorter than [the declared] expectation ... for the stop date."
Nine other North American plants will close or contract as the desperate automaker, operating well below capacity, seeks to preserve its status as world industry leader.
Double-teamed by declining interest in sport utility vehicles, its cornerstone product, and comparatively steep labor and benefits costs, GM has lost $4 billion this year in North America alone. Analysts have bandied about the dreaded B-word, bankruptcy, as an option.
'We'd heard rumors'
Though the Doraville factory was widely considered endangered, the news at the start of a holiday week sent shudders through its workers, past and present.
"We'd heard rumors it was on the chopping block," said recent retiree Bill Crawford, a pipe fitter and union rep for 19 of his 25 years on the grounds sprawled over 157 acres visible from I-285 in DeKalb County.
"It was kind of expected."
Others had refused to trust the speculation. "I don't believe it. I just can't grasp it yet," said Marion Harris, who logged 36 years in the production manager's office and is an officer in the salaried retirees' club. "Some of us had been led to believe it was infallible."
Those punching out after Monday's early shift seemed resigned to the plant's expiration. "It was not surprising," said Ricky Covington, who works with chassis.
Doraville was vulnerable because of its age. Unveiled in 1947, it is an elder in GM's family of shops.
But observers say the roster of doomed locations appears driven more by the prospects of models they assembled. The Doraville-built crossover minivans — Chevy Uplander, Pontiac Montana SV6, Saturn Relay, Buick Terraza — have fallen out of favor.
"GM is not the dominant force that it once was in the minivan segment," said auto industry analyst Catherine Madden of the research firm Global Insight. "Its competitiveness in that segment has dropped."
The plant's ripened state was just one of several factors leading to its ultimate demise, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
"The product in that plant is old," he said. Future minivan assembly, he and others predict, will shift to Lansing, Mich.
The GM facility closest to Doraville — in Spring Hill, Tenn., near Nashville — was the single unexpected victim on the list, with one line facing a shutdown. It swung open in 1990.
While autoworkers draw healthy wages and are showered with benefits relative to most industrial laborers, the Doraville clock-punchers confront a clouded future.
The contract with United Auto Workers guarantees supplemental unemployment benefits, or SUB pay, totaling 95 percent of normal wages. Laid-off employees with at least 10 years of service can collect SUB pay for up to 25 months.
However, the deal expires in September 2007, possibly before the shutdown in Doraville. So workers could be subjected to reduced protection during unemployment if the SUB pay provisions are changed in the next agreement.
"That would not be a shock," said Les Hough, director of research at Georgia State University's Usery Center for the Workplace.
Plant employees, who make much higher wages than most blue-collar workers in metro Atlanta, know life could be vastly different after Doraville.
"There ain't nothing out there with this kind of money," Scott Tarpley, a 20-year GM veteran who toils in the plant's body shop, said as he headed to his shift Monday afternoon. Tarpley said he expects to bring in $70,000 this year and hopes to move to a GM plant elsewhere after Doraville closes.
Further complicating the future, a revised labor contract could saddle retirees with less generous benefits, especially for health care.
"Concerned? Oh, I sure am," Crawford said.
Hough foresees a potential scenario of the UAW refereeing retirees, focused more on pensions and benefits, pitted against active workers, interested more in pay and job security.
"There's going to be tension" between those camps during negotiations over how to slice up an ever-smaller GM pie, he said. "It's conceivable that one of the auto companies would exercise the nuclear option and try to break the UAW."
The dramatic shearing of employees and plants will save GM $7 billion annually in its effort to fend off bankruptcy, a substantial amount though not enough for experts to declare the company out of the woods. Bankruptcy could enable GM to void the union contract and accelerate plant closings.
"If they keep going through money like they have been," Hough said, "bankruptcy within the next couple of years remains a distinct possibility."
GM also could reach through a loophole in the contract and declare any plant idle, without officially sealing it, by ceasing production of a particular line, according to Madden. Still, her research points to plant activity in Doraville through the 2008 models.
Offering a glimmer of hope, Cole observed that Doraville is at the tail end of the scheduled closings released Monday.
"If GM is successful with this shrinkage and gets on track quickly, they could alter these plans," he said. "I'm not saying Doraville [will be spared], but it is a possibility."
Still, shy of a shocking turnaround, analysts generally believe any stay of execution could be measured in months, not years. And metro Atlanta — once a thriving hub of automaking, with a GM plant humming in the Lakewood area until 1990 — will be reduced to a sole facility.
"I'm real sorry this is happening," said Margaret Baird, a retired secretary of 36 years who can recall construction crews putting up steel walls in the mid-'40s.
"I just can't imagine what has happened to General Motors."