Share this story
Close X
Switch to Desktop Site

More `Big Three' Plants to Close


SOME workers cheered as the last Dodge Omni rolled down the line at Detroit's Jefferson Avenue Assembly plant. But most stood mute, trying not to think about a future that for many autoworkers is at best uncertain. ``The idea of not knowing what's going to happen, when it's going to happen affects not only you, but your whole family,'' says Oscar Stirgus, who spent 20 years working at Jefferson Avenue.

That sentiment is being echoed by autoworkers all over the United States. Strained by slumping sales and a new generation of US-based Japanese assembly lines, the ``Big Three'' US automakers - General Motors, Chrysler, and Ford - are in retreat. Overcapacity is an industry nightmare. Plants seem to close every week.

About these ads

In the early 1980s, Jefferson Avenue played a pivotal role in Chrysler's celebrated turnaround. The plant built the first K-Car, the compact sedan that revived the automaker's rapidly falling market share.

But ``corporations can't keep plants open building nothing,'' says auto analyst Maryann Keller. By the Feb. 2 shutdown, the Jefferson Avenue plant had been operating at barely 20 percent of capacity. Yet half its production was piling up unwanted in factory and dealer lots.

More plant closings

And more plants will close. ``There are no fewer than eight assembly plants we won't need by the middle of the decade,'' says auto analyst and consultant William Pochiluk, of Autofacts, Inc.

Only one company may be able to avoid closing plants. Ford strictly adhered to a policy of not adding new plants during the last industry sales boom, though it meant a short-term sacrifice in market share.

``The company that seems to have the greatest surplus of ... grossly underutilized factories,'' says Ms. Keller, is General Motors. Its market share has plummeted from 46 percent a decade ago to 34.7 percent today (see table). GM has already closed nearly a dozen body and assembly plants since the mid '80s, but officials sidestep the question of whether more shutdowns are coming.

Chrysler, however, has already announced plans to close another assembly line. The two-phase shutdown of the underutilized St. Louis I plant will affect 3,700 hourly workers.

About these ads

The latest announcement was anything but unexpected, what with Chrysler's market share also on the decline, from 11.2 percent in 1988 to 10.3 percent last year.

And with car sales still in the doldrums, Mr. Pochiluk expects to see a lot more temporary closings and layoffs between now and April. ``The worst in this quarter is yet to come [before] a mild recovery in the summer,'' he says.

Labor contract negotiations

Each of the Big Three will be negotiating new labor contracts this year, and the closing of Chrysler's St. Louis plant is scheduled for the day after the Sept. 20 contract deadline.

The much-vaunted job guarantees negotiated into previous auto contracts have proven relatively ineffective, so when negotiations begin this summer ``the reaction of many workers may be hostility, fear, and the pressing of demands for further job security clauses,'' says Harley Shaiken, a professor of labor studies at the University of California at San Diego.

But company officials aren't keen to expand those provisions, particularly while they are looking for ways to control their bottom line in the face of increased competition from the Japanese.

``There's an obvious, deep-seated concern for some sense of job security,'' Chrysler Corp. Vice Chairman Gerry Greenwald recently acknowledged. ``But in the end, it can only come from building better quality and lower cost'' vehicles which he says are needed to boost sales. ``Any other form is postponing trouble.''

Union President Owen Bieber counters that ``workers don't design the cars or develop the marketing plans. Senior management calls those shots. But when they miscalculate or screw up, they all stay in place while the workers are told to hit the streets.''

Neither side is willing to mention the word strike, though it is clearly a possibility. But analyst Keller suggests that if the debate over job security does lead to a walkout, both sides will lose.

``This isn't 1970 when, if there was a strike, Americans would postpone buying new cars,'' she says. ``Toyota, Nissan, and Honda are perfectly willing to pick up the slack. If a company is struck, it may permanently lose market share.''

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.