Workers, towns cast adrift by GM bankruptcy

updated 6:38 p.m. ET June 1, 2009

DETROIT - Pontiac. Mansfield. Spring Hill. Orion Township.

All these places once thrived in the shadow of General Motors plants. But now their futures — and their very identities — are in doubt with the automaker’s decision to file for bankruptcy and shut down more than a dozen factories.

The closings will cause “a ripple effect, and eventually it’s going to ripple ... all over this country,” said the Rev. Robert Knox, 53, who worked for GM for 31 years before taking a buyout in 2006. He’s now an associate minister at a Baptist church in Pontiac, Mich., where GM will close an assembly plant.

“This city’s been affected for years because of plants closing and people moving out, and this is going to affect it more,” he said.

General Motors Corp., the once-mighty car giant whose plants were the lifeblood of many American communities, filed its Chapter 11 petition Monday in New York. It was the fourth-largest bankruptcy in U.S. history and the largest for an industrial company.

GM also revealed Monday that it will permanently close nine more plants and idle three others.

Some of the towns most threatened by GM’s woes would not exist without the automaker. The company has been part of everyday life by contributing to orchestras, community colleges and ballparks.

“It’s going to impact in a lot of ways we’re not even thinking about,” said Skip Allman, executive director the United Way of Richland County, home to an Ohio stamping plant slated to close.

Interactive GM's road to bankruptcy A look at key events in General Motors' long and sometimes troubled history.

Workers at the plant near Mansfield, Ohio, contributed $200,000 to the United Way a year ago. If that money disappears, some programs could be in jeopardy, including a system for helping soldiers return from overseas if a family member is dying and another program that provides student tutoring.

“It will be horrible,” he said. “We’re just praying for a miracle.”

In nearby Ontario, Ohio, a GM stamping plant that opened in 1956 created an entire community. Once a sleepy village of 700 people, the town grew to 5,500 residents and established a shopping mall, restaurants and one of the best school districts in the state.

“General Motors set the stage,” said Ontario Mayor Ken Bender. “It is the catalyst.”

Job losses at the 1,200-worker plant in the last year forced the city to cut its budget by about 20 percent. The closing of the plant is likely to force some layoffs, including at the police department, Bender said.

In Pontiac 27.3 percent of residents live below the poverty line, compared with 13.3 percent nationally, according to the Census Bureau. In March, Michigan Gov. Jennifer Granholm appointed an emergency manager to take over the city’s finances after local officials were unable to resolve budget problems including a deficit approaching $12 million.

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