U.S. News

GM workers face uncertain future in hard times

PONTIAC, Michigan (Reuters) - At 8:15 a.m. ET on Monday, a General Motors executive gave hourly workers at its assembly plant here the news they feared most: the plant would close by October, robbing most of them of their jobs.

United Auto Workers union local 594 president Doug Bowman (R) talks with General Motors auto worker retiree Larry Oliver, 76, in the union's parking lot in Pontiac, Michigan June 1, 2009. REUTERS/Rebecca Cook

Although GM’s bankruptcy was a carefully managed affair right down to publicizing the time the company would file, the decision about which plants would be closed was a closely guarded secret.

The automaker had been expected for months to try to restructure under bankruptcy protection, but no one knew who would be left on its payroll -- a source of high anxiety for the company’s workers.

The early morning announcement brought no comfort to United Auto Workers union members here.

“We had hoped we could stay open, but all the analysts had said our plant was likely to go,” said 54-year-old Tom Etienne.

“So in the back of our minds, we were kind of expecting it.” He shrugged his shoulders. “But it’s not welcome news.”

Some 1,100 people work at the plant in Pontiac, which makes GMC Sierra and Chevrolet Silverado full-size pickup trucks.

Demand for those trucks has evaporated. Sales were down more than 40 percent in the first four months of 2009.

After 26 years at GM, Etienne said if he is lucky he may get one of the few transfers to a plant that will remain open. The alternative is early retirement with a reduced pension.

“I’m willing to commute, but I have kids and grandkids here, so I can’t uproot everything and move,” he said.

GM said on Monday that as part of its effort to survive, it would close 14 facilities and cut about 20,000 jobs from its UAW-represented workforce of 54,000.

Once a symbol of U.S. economic strength, the 100-year-old automaker is now majority owned by the U.S. government.


Michigan, which for decades was synonymous with the U.S. auto industry, has a 12.9 percent unemployment rate -- the highest of any state in the nation. The overall unemployment rate in the United States in April was 8.9 percent.

Doug Bowman, president of UAW Local 594 which represents the workers at the Pontiac plant, said the news was a blow.

“I didn’t think they would shut down this plant,” he said. “We have done a great deal to become competitive, and GM could have retooled the plant to make different cars at low cost.”

He did not know how many workers might be transferred.

“It’s the younger workers with kids I feel sorry for. The job market is really bad out there right now,” Bowman said.

“There are a lot of mom-and-pop businesses dependent on the jobs here, so this will be devastating for our community.”

Bowman said that last week his members voted in favor of a new UAW agreement with GM containing wage and benefit concessions, despite knowing that their jobs could be on the line.

“It’s not a good day for anyone around here,” he said.

A few miles away at the Orion assembly plant, which makes the Pontiac G6 and the Chevrolet Malibu, life was no more certain that it had been yesterday.

GM said in April that it would scrap the 83-year-old Pontiac brand, putting the Orion plant’s future in jeopardy.

But on Monday the company said Orion was one of three assembly plants, along with one in Janesville, Wisconsin, and another in Spring Hill, Tennessee, in the running to make a small car.

“At least we’re not on the closed list,” said Pat Sweeney, president of UAW Local 5690, which represents about 3,400 active and laid off workers at the plant. “There is a light at the end of the tunnel.”

“But we’re one of three plants. Our members could still all end up out of work,” he said. “We’ll do all we can to persuade GM to make those cars here, but we have no guarantees.”

Plants will be closed in Michigan, Delaware, Ohio, Indiana, New York, Virginia, Massachusetts and Florida.


Jobs in the auto industry were once among the most secure in the United States, paying a good wage and guaranteeing a decent lifestyle before and after retirement.

Sons and daughters joined their fathers on assembly lines on which their grandfathers had worked. Auto company plants became the centerpieces of American towns and cities.

Now, about 500,000 GM retirees are bound by the newly amended agreement with the UAW that reduces vision and dental care. The UAW also agreed to receive half of the $20 billion GM owes a union-aligned healthcare trust in the form of stock and new debt instead of cash.

“The UAW’s leadership did all they could to reduce the impact on retirees,” Bowman said. “But as retirees outnumber active workers so heavily, they could only do so much.”

In the parking lot at UAW Local 594, retiree Larry Oliver turned up in his grey 1982 GMC truck (150,000 miles on the odometer and in pristine condition).

Oliver, who retired in 1998, worked here for 32 years.

“I’m afraid they’re going to take the rest of my benefits and I’ll have nothing left,” he said. “I’m going to sell my other truck, take the money to the funeral home and make arrangements for when I die.”

“I’m 76 years old, man. I’ve got to leave enough money for them to put me in the ground.”

Reporting by Nick Carey; Editing by Toni Reinhold