GM to Take Two Plants Off Closure List
James M. Amend Ward's AutoWorld, Jun 1, 2009 12:00 PM

General Motors Corp. Intends to Take at least two manufacturing sites off a list of 16 unidentified facilities targeted for closure as part of its restructuring, according to the auto maker's latest modified labor agreement.

The company's outline of product and investment commitments included in the agreement reached with the United Auto Workers union in late May, and facing a ratification vote by 61,000 rank-and-file members at presstime, says GM plans to utilize an idled assembly plant to build a “compact and small car.”

The document obtained by Ward's says the site will be retooled to produce 160,000 units annually, and the products will be compact and small cars not currently built at any GM facility in the U.S. The auto maker also will restart an idled stamping facility to support the assembly operation, the modified contract says.

“The company and the union held extensive discussions regarding the importance of maintaining a strong manufacturing presence in the U.S. and the need to secure and protect job opportunities for UAW members,” the agreement reads.

The UAW expressed outrage recently at GM's plan to sharply raise the percentage of vehicles it builds overseas and imports to the U.S. The modified agreement appears to provide for lower labor costs at the retooled site. Small cars notoriously have been unprofitable for GM in the past.

GM could use a portion of the $15 billion in available government loans to retool the plant sites. A caveat of the loans is they must be used to retool a facility that will produce more fuel-efficient vehicles than those previously built at the location.

But which sites GM wants to save among the 16 facilities to be shuttered is not revealed in the modified labor agreement.

At presstime, GM was still operating under a government-imposed deadline of June 1 to restructure or enter bankruptcy. It was widely expected the auto maker would announce the plants slated for closure, reportedly four assembly sites and 10 stamping and powertrain facilities, on June 1, when it was expected to file for Chapter 11.