GM plant closing highlights regions manufacturing dependency

October 14, 2008
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Michigan Future Inc. President Lou Glazer said West Michigan has held onto manufacturing jobs longer than other regions of the state. With General Motors' very survival being questioned, the loss of the 36th Street plant is simply "another chapter in the same story."

Employees at the GM stamping plant on 36th Street in Wyoming, which began shipping panels, fenders and other parts to GM assembly plants in July 1936, were advised by the company Monday that the facility will be closed by the end of December 2009.

A GM spokesperson said lower demand for large pickups and SUVs, coupled with the distance between the Wyoming plant and GM plants it supplies, led to the "difficult decision" to phase out production there over the next year.

Chris Lee, speaking from the GM Tech Center in Warren, said approximately 1,340 UAW employees and about 180 salaried employees will be affected.

"The reality is that the growing part of the American economy is in the knowledge-based part of the economy, not the factory part of the economy," Glazer told the Business Journal. "In West Michigan, you've retained more of the factory economy than the rest of the state."

In fact, he said, far from being the bright spot in the state's bleak economy, West Michigan has the worst of both worlds: too many old-economy factory jobs that are subject to disappearing and too little growth in new-economy knowledge jobs.

"It's hard to see how you get future growth by being concentrated on the factory part," Glazer continued. "The knowledge side of the economy is growing slower than Southeast Michigan, and they're not growing quickly. To some degree, Grand Rapids is at the extreme end of both."

The tragedy of more than 1,500 direct jobs lost is compounded when multiplied by the thousands of other jobs and businesses that have been serving the plant's workers since it opened in 1936, he said.

"I don't see anybody evaluating the competitiveness or noncompetitiveness of West Michigan based on the GM plant, when everybody understands that GM is in trouble no matter where they are located," Glazer said. "I do think it shows the vulnerability this region has in being concentrated in factory work and not the knowledge economy."

Fiona Hert, Grand Rapids Community College dean of workforce development, said the college's resources stand ready to help GM workers with short-term training, more extensive job training and health care programs.

"Traditionally, we have been involved with Michigan Works! agencies to provide a liaison for people who are faced with the challenge of looking for new positions and retraining," Hert said. "We will be available to reach out as soon as we can make that connection with people."

Hert urged those being laid off to consider their options in a timely manner. "The application processes that needs to occur is not extensive, but they do take time," she said.

GM's Lee said that more than 40 percent of the Wyoming plant's production "is associated with parts for full-sized pickups, full-sized SUVs and mid-sized SUVs, which have been the hardest-hit segments in terms of shrinking market demand." GM announced in June it would be closing some of those assembly plants and consolidating stamping operations.

He said GM is working on a leaner organization with a "regional contiguous footprint," to reduce inventory in the shipping "pipeline" and the cost of shipping. A longer shipping "pipeline" requires more inventory and more containers for moving the parts. Those factors are affected by the distance between a plant and the other plants it supplies.

"With Grand Rapids being over on the west side of the state, that was a factor," said Lee.

No other remaining GM stamping or assembly plants still operate in West Michigan. GM pickup assembly plants are still operating in Pontiac and in Canada.

GM North America production in the third quarter was down 10 percent compared with a year ago, according to the company's corporate Web site. The automaker is predicting fourth quarter production will be about 16 percent below the same quarter last year.

Lee said the Wyoming plant is roughly 2 million square feet on 92 acres.

Wyoming city manager Curtis Holt said the GM plant is the city of Wyoming's highest taxpayer.

"We'll see a hit to our tax base that is significant. We figure the loss is about a million dollars in tax revenue," he said, adding that is estimated to represent about 7 or 8 percent of the city's tax revenue.

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