GM Plans to Shut Another Plant and Cut 2,100 Jobs
General Motors, adjusting to the harsh reality that it no longer dominates the American car market, said Wednesday that it plans to close yet another assembly plant, this one in Framingham, Mass.
The closing, slated for Aug. 1, will eliminate the jobs of 2,100 workers, as well as those of another 1,200 workers now on temporary layoff from the plant. The 40-year-old Framingham plant produces the Chevrolet Celebrity and Oldsmobile Cutlass Ciera models, part of an aging line of intermediate sedans that GM is slowly phasing out.
For GM, Framingham marks the 20th North American manufacturing operation--and seventh assembly plant--that the world’s largest auto maker has announced plans to shutter since 1986.
Most of those closings were announced in one dramatic action in November, 1986, a move that was designed to slash GM’s surplus car-making capacity and stabilize its costs. But the rapid erosion of GM’s share of the U.S. car market since that time has forced GM executives to concede that the company has to make even steeper production cuts and must quickly learn how to make money even if it sells only a third of all American cars, instead of GM’s once traditional one-half.
“GM (executives) are out to prove to the board of directors that they can make real big money with only 33% to 35% of the market,” said Jim Wangers, president of Automotive Marketing Consultants, a Warren, Mich.-based automotive consulting firm. “They are starting to accept the fact that this is going to be the way it is for awhile.”
The closing announcement, which comes far in advance of what is required under the new federal plant closing notification law, wasn’t unexpected. Indeed, the facility has been shut and reopened several times throughout the 1980s, and analysts had long suspected that Framingham would be included in any new round of plant closings at GM.
But the news still upset both the leadership of the United Auto Workers and the state Administration of Massachusetts Gov. Michael S. Dukakis.
UAW Vice President Donald Ephlin, director of the union’s powerful GM Department, started his career at the Framingham plant, and union sources acknowledge that he has been influential in persuading GM executives to keep his old home plant open long after some inside GM wanted it closed for good.
But Ephlin, who said in a statement that he was “distressed” by the closing announcement, is retiring next summer--coincidently just about the time the Framingham plant is scheduled to shut down.
GM spokesman Ed Dilworth denied, however, that Ephlin’s retirement was a factor in the closing decision.
Meanwhile, for Dukakis, the GM decision represents something of a political embarrassment.
During his presidential campaign, Dukakis often took credit for persuading GM to reopen the Framingham plant in 1983--after the plant had been closed briefly the year before--and cited it as one example of the economic recovery he had brought to Massachusetts.
On Wednesday, Dukakis said he was “deeply concerned” by the closing, adding that he plans to meet with company and union officials in Framingham today to discuss ways the state can help “lessen the impact” of the layoffs.
Officially, GM said Framingham was only being “idled” and could reopen someday if the company needs it. But union critics have charged in the past that GM has tried to avoid using the term “plant closing” simply to get around stiffer contractual obligations to its workers.
Frustrated by Politicians
In case of a plant closing, GM’s 1987 agreement with the UAW calls for workers with certain seniority levels to enter a “Job Bank” where they can receive substantial income and training benefits indefinitely until GM places them in another job.
Meanwhile, Massachusetts state officials said that GM actually came close to modernizing its Framingham plant--to produce a new line of plastic mini-vans for the 1990 model year. But GM was frustrated, the officials added, by local politicians in Framingham who balked at turning over city-owned land for the expansion project. GM decided to build the new vans in Tarrytown, N.Y., instead.
Without a new product to build, Framingham was doomed. That’s because GM is slowly phasing out Framingham’s intermediate “A-body” cars--until recently the bread and butter of GM’s lineup--in favor of the new “GM-10” lineup, which includes the new Chevrolet Lumina, Oldsmobile Cutlass Supreme, Pontiac Grand Prix and Buick Regal.
As recently as a year ago, GM had five plants building A-cars. But when Framingham closes, only two plants, one in Oklahoma City and another in Quebec, will still build the models, which include the Celebrity, Cutlass Ciera, Pontiac 6000 and the Buick Century. A third plant in Ramos Arizpe, Mexico, will supplement their output with some A-car exports to the United States, according to Dilworth.
By the 1992 model year, only Buick and Oldsmobile will still be selling A-body cars, and production is likely to be further consolidated down to one plant, probably Oklahoma City, industry analysts say.
In the end, Framingham was simply the victim of GM’s shrinkage; GM has had too many plants building too few cars. Industry analysts say the Framingham announcement is just a recognition of the facts of life at the newly downsized GM. Said one analyst: “They are just making official what everybody knew was coming for years.”
