GM plant relaunch possible
GM plant relaunch possible?
General Motors repayment of government loans and report of an $865 million profit — the automaker’s first positive cash flow since 2007 — has the local United Auto Workers’ chairman hopeful that Spring Hill’s idled factory could be reopened soon.
“Those two things show that the recovery is well under way and that GM is on its way back strong,” said Mike Herron, chairman of the UAW Local 1853.
Also boosting hopes of a Spring Hill relaunch is that GM is having trouble meeting rising demand for several of its models, including the Chevy Equinox and Terrain, Cadillac SRX and Buick LeSabre.
“The demand is outstripping the ability to be able to supply the product,” Herron said.
GM has said it will repay the $6.7 billion loan portion of its government aid by June, earlier than promised. The rest of the $52 billion it borrowed from the government would be repaid when the company sells stock to the public.
Mark Reuss, GM’s North American president, said last week that while there were no immediate plans to reopen Spring Hill’s plant, he didn’t shut the door on the possibility.
“Janesville (Wisc.) and Spring Hill are the things that sit empty in the new GM," he said. "Is there something going to happen tomorrow? No, there’s nothing. But those are always possibilities. Why wouldn’t they be?"
Herron said, however, with U.S. auto sales nearing a Seasonally Adjusted Sales Rate of 12.5 million, the automaker will need the additional manpower soon.
“GM at some point is going to need the capacity. We think that it’s just a matter of time out here,” he said. “This rebound is going to be totally dependent upon us being able to provide products to the customers that are out there that are looking for them.”
Herron said union leaders are continuing to “push very hard” for the Spring Hill factory to reopen.
“We remain optimistic that GM did not keep this plant for letting it sit here idle,” Herron said. “It’s the third newest plant that they’ve got in the system and it is still a plant that was at the top of the performance chart when General Motors moved the (Chevrolet) Traverse to Lansing.”
According to a report in the Wall Street Journal, GM has also indicated to the union it will no longer pay employees to leave the company. UAW officials had pressed GM to consider another round of buyouts and retirement incentives.
Herron said he’s hopeful though that GM will eventually reconsider that decision because it would allow long-time employees to be able to retire and stay where they are, and because it would be more costly for the company to transfer those workers to other plants.
He said about 800 union members have been transferred to other locations and that most weren’t happy about the move.
“I’ve got people that they’re offering $30,000 to go ahead and move to a plant that they don’t want to go to,” Herron said. “Why not take that $30,000 and give the people the opportunity to retire with dignity?”
The Associated Press contributed
Story created May 20, 2010 – 15:44:48 EDT.