OKC GM Plant to close????

[Patrick]

Most of you heard the news today that GM plans to close several plants across the country, as they try to streamline their company and become more profitable. What do you think are the chances of GM closing the OKC plant?

I'd give it a 50/50 shot. Employees of course make less here so that gives them an advantage keeping a plant here, but I've also been told we have one of the least productive plants.

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"GM Plans to Cut 25,000 U.S. Jobs by 2008

By JOHN PORRETTO, AP Auto Writer
1 hour, 17 minutes ago



WILMINGTON, Del. - General Motors Corp. plans to close plants and eliminate 25,000 manufacturing jobs in the United States by 2008 in an attempt to restore profitability at the world's largest automaker, its chairman said Tuesday as he fended off calls for his resignation.

Chairman and Chief Executive Rick Wagoner told shareholders at GM's 97th annual meeting in Delaware that the capacity and job cuts should generate annual savings of roughly $2.5 billion. About one out of six jobs in the United States will be eliminated.

Wagoner revealed the cutbacks as he laid out a strategy to invigorate GM's North American operations, its biggest and most troubled, amid lackluster sales of its highly profitable trucks and sport utility vehicles, which have been hurt by high fuel prices.

GM posted a $1.1 billion loss in the first quarter and its U.S. market share has fallen to 25.4 percent from 27 percent a year ago, as customers increasingly are choosing models from Toyota Motor Corp., Nissan Motor Co. and other Asian automakers.

The cuts would be on top of earlier reductions that pared GM's U.S. workforce from 177,000 hourly and salaried employees at the end of 2000 to 150,000 at the end of last year, according to figures provided by GM.

"Let me say up front that our absolute top priority is to get our largest business unit back to profitability as soon as possible," said Wagoner, who added that with $20 billion in cash and short-term investments, GM is in no danger of going out of business anytime soon.

"But if we don't fundamentally get at these structural issues — whether it's gee-whiz, exciting products, or the right distribution, or a solid cost structure in every element of business — the risk of continually being weakened over time is real," he said.

Wagoner wouldn't say which plants are in danger of being closed, but David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said the most likely targets are several older plants. Those include facilities in Janesville, Wis.; Doraville, Ga.; Oklahoma City and Pontiac, Mich., he said. The Janesville plant was built in 1919 and the Doraville plant was built in 1947. The other two plants were built in the 1970s.

Cole said GM probably won't close plants that have recently undergone costly renovations, such as the plant in Lordstown, Ohio, that recently got $1 billion worth of upgrades.

Disgruntled shareholders, who saw the value of their shares fall to a 10-year low in April, gave Wagoner an earful on Tuesday.

"This company is sick," said James Dollinger, a Buick salesman from Flint, Mich., who angrily told Wagoner he should resign.

Fellow shareholder John Lauve compared the GM leadership to officers aboard the Titanic as it headed for an iceberg. "The Titanic sank because the directors ignored the warnings," said Lauve, who criticized everything from gas gauges in GM vehicles to the company's health-care cards. "We need to excel at the basics."

Fending off such criticism, Wagoner outlined four priorities: increasing spending on new cars and trucks; clarifying the role of each of GM's eight brands; intensifying efforts to reduce costs and improve quality; and continuing to search for ways to reduce skyrocketing health-care expenses.

He noted that health-care expenses add $1,500 to the cost of each GM vehicle. This puts GM at a "significant disadvantage versus foreign-based competitors," Wagoner said, echoing comments made by the Standard and Poor's and Fitch ratings services after both reduced the company's bond rating to "junk" status last month.

Wagoner described as intense the status of ongoing negotiations with the United Auto Workers and other unions on ways to significantly reduce GM's health-care costs. GM's health-care tab for its 1.1 million current and former workers and their families is more than $5 billion a year and rising.

"We have not reached an agreement at this time, and to be honest, I'm not 100 percent that we will," said Wagoner, the CEO since 2000 and chairman since 2003.

To date, the UAW has indicated it won't reopen its contract, which expires in 2007, and agree to pick up a larger share of soaring health-care costs. Messages left Tuesday with the UAW were not returned.

Wagoner said another part of the company's strategy is to make GM's eight brands more distinct from each other. Chevrolet and Cadillac will continue to have full vehicle lineups, he said, but the company's other six brands — GMC, Pontiac, Buick, Saturn, Saab and Hummer — will be more tightly focused on niche markets.

"In some cases, such as Pontiac and Buick, it will mean fewer but stronger entries in the future," Wagoner said.

Wagoner said the company also plans to put less emphasis on incentives and focus more effort on selling GM vehicles in top markets like New York, Miami and Los Angeles.

General Motors shares rose 42 cents, or 1.4 percent, to $30.84 in afternoon trading on the New York Stock Exchange. That is close to the $31 a share offer made by billionaire investor Kirk Kerkorian's for 28 million GM shares that was scheduled to expire on Tuesday.

Wagoner said it was vital for the company to cut costs by improving efficiency at its manufacturing plants. He said plant closings and idlings in recent months will reduce assembly capacity in North America from 6 million vehicles in 2002 to 5 million by the end of this year.

According to the Harbour Report, an annual productivity survey released last week, GM's 30 North American plants operated at an average of 85 percent of their capacity in 2004, compared to an average of 107 percent for Toyota's six North American plants.

GM already shut a factory in Linden, N.J., in April and a factory in Baltimore in May, affecting about 2,000 employees. "

[mranderson]

GMAD Oklahoma City is the most modern plant GM has. I place the odds of closing at less than ten percent.

[venture]

OKC should be safe with the low labor costs and the benefits of a right to work state. With that said, one of their more expensive plants labor wise...is in Toledo OH. That powertrain plant is their most productive plant in the system (according to GM). So its going to come down to what actually makes them more money...lower labor costs or better productivity.

[HOT ROD]

I would think the OKC plant would be safe, especially with the recent tooling investment that GM made. However, there might be furloughs or layoffs at the plant - in part due to the automation and in part due to the industry.

It's sort of like a double edged sword: The OKC Plant will not be axed because it is highly automated and could easily switch from one product to another. Because of this, OKC workers might not be needed as much - especially during an industry slump.

[Patrick]

I wouldn't be surprised if they go ahead and cut the second shift like they had considered. Hopefully though with the recent investments made in the plant, they won't close it. Had May 3rd happened this year, I bet GM would've decided to close the plant.

[OUman]

The ones at most risk to be closed for good are the ones currently producing only SUV's-Denalis, Yukons, Suburbans, etc. They're selling 24% less than they did a few years back, and GM will see no reason to have so many plants producing SUV's. Which provides the Ok City plant with a buffer, since all XUV production has been shifted over to Malibu's.

OUman

[Patrick]

The ones at most risk to be closed for good are the ones currently producing only SUV's-Denalis, Yukons, Suburbans, etc. They're selling 24% less than they did a few years back, and GM will see no reason to have so many plants producing SUV's. Which provides the Ok City plant with a buffer, since all XUV production has been shifted over to Malibu's.

OUman

I'm confused. Last time I checked, we're building the Trailblazer, correct? That's an SUV.

[OUman]

Our plant was chosen for production of the new Envoy XUV, but it wasn't selling that well, now (atleast from what I've heard in the news), the plant's producing, or will shortly start producing Malibu's.

OUman

[Patrick]

Hmmm.....interesting......where did you hear that from? That would be good news IMO, but I talked to an employee a few weeks ago and he said they were still producing Trailblazers and Envoys.

[Patrick]

Here's the latest article I found on the GM plant...it may indeed close:

"Oklahoma City (AP) _

An industry analyst says the general motors plant in Oklahoma City could be targeted by company officials for closure. G.M. chairman and chief executive officer Rick Wagoner told shareholders in Delaware today about plans to close plants and eliminate 25-thousand manufacturing jobs by 2008. David Cole of the center for automotive research in Ann Arbor, Michigan says the Oklahoma City plant, built in 1979, and three others could be shut down because of their ages. A Pontiac, Michigan, plant was built in the 1970s, a plant in Doraville, Georgia, was constructed in 1947 and a Janesville, Wisconsin, facility was built in 1919. Officials with the United Auto Workers Local 1999 in Oklahoma City didn't return several phone messages seeking comment today. It currently has about 25-hundred employees and an estimated one billion dollar annual impact on the Oklahoma economy.

[okcpulse]

GM closing its plant will definitely be a blow to Oklahoma City's economy. We already lost Lucent Technologies, and that plant has sat dormant for the last couple of years. These will be two very huge properties sitting vacant. But I will criticize GM for making the decisions to close older plants.

The company spent $700 million to switch our plant from making Malibus to making SUVs. I felt all along it was a poor decision. SUVs guzzle gas, and at $2 a gallon, of course people are not going to want to buy them! So, GM has wasted over a billion dollars just close down the plant.

Now it is up to city leaders to get more aggressive with state leaders and fill the vacancies at Lucent and perhaps at GM, if it closes. And please, no more call centers and vehicle assembly plants. Those plants gutted Michigan alive, and it's getting ready to happen to us.

Let's focus hard core on education attainment, biotechnology and computer technology. I hope to return to Oklahoma City someday to help grow our film industry... something I hope to get off the ground.