Uncertainty swirls around GM

BG plant expected to see more slowdowns, layoffs, though more lines could eventually be made here

By JENNA MINK, The Daily News, jmink@bgdailynews.com/783-3246
Tuesday, April 28, 2009 11:44 AM CDT

As the General Motors Bowling Green Assembly Plant prepares to shut down for the next two weeks, workers Monday received yet another round of negative news - as part of its viability plan, the company will cut 21,000 more jobs, close three additional plants and nearly half its dealerships and end the Pontiac brand.

Still, the company has not released details concerning the cuts, adding to the uncertainty surrounding local workers’ jobs.

“That uncertainty caused a great deal of anguish,” said Eldon Renaud, local UAW president. “It’s the not knowing that is the most troublesome.”

Still, in the coming months the local plant will likely experience further slowdowns and more job cuts. And, as plants close and brands are eliminated, the company will probably consolidate plants, said Bill Parsons, former managing director for the Global Advanced-Leadership Center in Bowling Green and chair of the Global Automotive Conference.

“I wouldn’t be surprised to see GM produce something else at (the Bowling Green plant along with the Corvette),” he said.

Still, the company’s decision to cut Pontiac will result in a loss of customers, Parsons said.

“Getting rid of the Pontiac brand is awful,” Parsons said. “When you cease to continue to provide the brand that people have been buying, in some cases their entire lives ... they don’t want to buy a GM brand.”

At Wilson Chevrolet-Pontiac-Buick-GMC Truck in Franklin, Pontiac sales are down 50 percent to 60 percent and have lagged for the past four or five years, owner Eddie Wilson said.

Still, “it’s a small segment of products we carry,” he said. “Our outlook has got to be improving. To what extent, it depends on what General Motors has to cut.”

At Leachman Buick Pontiac GMC on Scottsville Road, Pontiac sales have kept up with other brands, said David Jaggers, general manager.

“They’ve been great,” he said. “We’re not disappointed with Pontiac sales or the product.”

In fact, Pontiac outsells several other GM brands, including Cadillac, but GM needed to keep a luxury vehicle in its lineup, Jaggers said.

He said Pontiac owners will remain protected even as the brand is eliminated.

“If you own or purchase a Pontiac ... you will never have a warranty or repair or parts issues whatsoever,” he said.

As General Motors reduces its lineup to four main brands, Leachman will still carry Buick and GMC vehicles, giving it 50 percent of the company’s lineup.

“We have mixed emotions,” Jaggers said. “The long-term and the very near future is positive. We are not one of the dealers that will be leaving General Motors.”

Still, the specifics of the dealership closures are also under wraps while GM attempts to reduce its debt and avoid bankruptcy. The company has offered stock shares to its bondholders, the UAW and the federal government in exchange for debt payment. If accepted, the exchange would give the government and the UAW a majority share of the company’s stock.

GM and the UAW have been negotiating payments to the Voluntary Employee Beneficiary Association - a retiree health care trust fund. Under the new plan, the UAW would swap stock shares for the $20 billion promised to VEBA.

The UAW agreed to a similar deal with Chrysler and “with the history of pattern bargaining, I’d say something similar will be brought to the UAW GM members,” Renaud said.

Still, Renaud said he would rather have the VEBA payment delayed than accept stock shares.

“Who knows what the price of stock is going to be worth,” he said.

If the UAW accepts GM’s offer, the VEBA would automatically lose about 25 percent of its promised funds, Renaud said.

When UAW members negotiated the VEBA contract, they were certain it would protect current and future retirees’ health care for decades, he said.

“We’re just middle class working people working on an assembly line,” he said. “We’re not getting big bonuses; we’re working hard to try to have a retirement some day after working 30-plus years on an assembly line.”

But handing over stock shares to the UAW would give the organization more control of the company, which would be a plus for union workers, Parsons said.

Still, the stock swap means the government would own 50 percent of GM, which is not a good idea, Parsons said.

“Today the government is really calling the shots and they would continue to call the shots, and that’s never a good thing,” he said. “It’s a good thing for the government to provide guidance, but not decision making.”

But will all parties agree to the plan? At this point, they must all make adjustments, Parsons said.

“I think that when you’re looking at the edge of a cliff and looking down at the abyss, you say, ‘Do I continue to walk straight or do I stop and do something else?’ ” he said. “And that’s what’s going happen.”