US autoworkers feel the pain of SUV, truck decline
Tue, Oct 21, 2008
Reuters
By Nick Carey
GRAND RAPIDS, US - The end of America's decade-long love affair with the sports utility vehicle means Marco Sermeno will lose his job, again.
Sermeno, a die-maker, is one of 1,340 hourly workers at a General Motors Corp stamping plant in this Western Michigan city that the No. 1 U.S. automaker recently said it will close at the end of 2009.
"The closure announcement was devastating," Sermeno said. About 40 percent of production at this Grand Rapids facility supplies GM's full-size pickup trucks and SUVs.
For a 17-year GM veteran like Sermeno, the closure is a depressingly familiar story.
"This will be my third plant closing," he said. "If I can find a job at a different GM plant, I'll have to move."
Sermeno has children about 100 miles away where he used to work in Flint - once the heart of GM's automotive empire, with more than 100,000 hourly workers at its peak, more than its total 64,000 hourly workers today. Unfortunately for Sermeno, his best chance of a new job with GM is in Ohio.
"I haven't got any choice, I have to work," he said. "But it means I'll be even further away from my family."
Compounding the uncertainty over the jobs picture is the news over the past week that GM is in talks to acquire Chrysler, the No. 3 U.S. automaker.
A merger, analysts say, would almost certainly mean more GM plant shutdowns, tens of thousands of more job losses and more upheaval for people like Sermeno in Michigan and elsewhere.
On a recent day outside the Grand Rapids plant where some have worked for decades - as did their parents or grandparents - workers were sad but resigned to their fate.
For some the closure means moving on to work in another GM plant. If, that is, they can find an available spot in the automaker's dwindling roster of facilities.
"GM is not going to be able to absorb all these people," said Daniel Smigel, who has worked here for 30 years.
Smigel's grandfather and father also worked here.
"There's always been one of us working here, sometimes two. I'm lucky. With 30 years I'm close enough to retirement and I'm just hoping GM gives us a good (layoff) package," he added.
"It's the younger workers I feel sorry for."
Those willing to move must contemplate taking their children away from schools and friends and selling homes in the worst U.S. housing market since the Great Depression.
"No one will be able to sell in this market," said Mike Fase, 53, who was born in Grand Rapids, has worked here for 24 years - as did his father for 30 years. Fase expects he will have to leave Michigan for work.
"Even if we can, our homes aren't worth what we paid for them," he said.
FALLING OFF A CLIFF
Once the darling of the U.S. auto industry, gas-thirsty SUVs, trucks and minivans made a lot of money for Detroit's Big Three - GM, Ford Motor Co and Chrysler, which is owned by private equity group Cerberus Capital Management LP .
But sales waned in recent years, then fell off dramatically this summer as gas prices soared above $4 (S$5.91) a gallon. Although gas prices have fallen more than 20 percent since then, a slowing economy and the credit crunch have further hurt sales.
U.S. sales of light trucks and SUVs were down 33 percent for the year through to September. Sales of domestic midsize, large and luxury SUVs were down 50 percent in September alone.
That abrupt decline has hurt the U.S. automakers more than their Asian or European counterparts because they are heavily dependent on trucks and SUVs. The Big Three has been forced this year to announced plant shutdowns and plans to build more small cars.
This month alone GM said it would close an SUV plant with 1,200 hourly workers in Moraine, Ohio, an SUV plant in Janesville, Wisconsin, with 1,200 hourly workers, plus shed 1,500 jobs in Michigan and Delaware.
And of course the Grand Rapids closure, which workers said was a disappointment after the United Auto Workers union agreed last year to work rule changes for a local labor contract.
"The mood here is very somber," said Dianne Henry, who has been with GM 30 years.
This will be her third and last closure.
"I don't blame GM, they did all they could to keep us open," she added. "I am too tired to move again and I'm close to retirement, so I'm hoping they will give me a good package."
A few workers here said they hoped the U.S. government would somehow intervene to save the plant.
"We need a government that will help us," said Rick Cortez, who has worked here for 23 years.
Most, however, said that no help would be forthcoming from the government or anyone else.
"Nothing will save this plant, GM has already made up its mind," said Dan Jenks, a forklift driver who has worked here for 24 years. He said he would not seek a job with GM if it involved taking his family away from Grand Rapids.
"I can't say I'm surprised that GM is going to close us down, but I am totally bummed out about it," Jenks added.