GM to cut up to 2,850 jobs at two factories

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Posted 8:07AM on Friday, February 15, 2002

DETROIT - General Motors Corp. says it is cutting up to 2,850 jobs by eliminating a shift at two plants -- including one in Michigan. GM spokesman Dan Flores said Thursday that the cuts will affect up to 1,750 jobs at Michigan's Orion Township Assembly plant. Orion currently employs 3,700 hourly workers. Company officials said the staggered layoffs will begin April 15 at the Orion plant and the Linden truck plant in Linden, New Jersey, where 1,100 jobs will be affected. "These are obviously difficult decisions to make," Flores said. "However, GM makes its production decisions based upon market demand." There would still be one shift of production at each of the plants, Flores said. Under GM's labor contract with the United Auto Workers union, laid-off workers in will get 95 percent of their straight-time pay for up to 42 weeks. Some workers are expected to transfer to other GM plants, The Detroit News reported. The cuts come as GM tries to trim excess North American capacity without violating the United Auto Workers union contract. The contract prohibits Detroit's automakers from closing any U.S. assembly plants before September 2003. GM, the worlds largest automaker, is currently running its North American factories at 80 percent of capacity. The Orion plant makes the Pontiac Bonneville, Buick Park Avenue, Oldsmobile Aurora and Buick LeSabre. January sales were down 33 percent for the Bonneville, more than 39 percent for the Park Avenue and 80.7 percent for the Aurora compared to this month in 2001, Flores said. Combined sales of the four cars fell 37 percent in January after dropping 12 percent in 2001. GM is considering whether to invest $275 million to $325 million to produce a new vehicle at the 19-year-old Orion plant. Analysts say GM is considering building the next-generation Pontiac Grand Am there. The current Grand Am is built in Lansing. Orion officials have offered GM a $17 million tax credit over 12 years if it makes the new investment. The state is offering a $59.5 million tax credit over 20 years for the project through the Michigan Economic Development Corporation. "We're in constant contact (with GM). We're still hopeful it will move forward," said MEDC spokeswoman Jennifer Kopp. If Orion wins the new product, GM has said it will only need 2,200 to 2,600 workers at the plant. Pat Sweeney, president of UAW Local 5960 at Orion, said the plant should be able to absorb the job reductions through retirements. Just three years ago, GM held off on building a new $250 million paint shop at the plant, saying the facility wasn't competitive enough with other plants. But Ron Harbour, a manufacturing expert with Harbour and Associates, says workers at the plant have dramatically improved productivity and quality. "They've really made a lot of progress," Harbour said. "Their problem is they just don't have a product that's selling. You can't blame the plant on this one."