Times change, but not Baltimore GM plant

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The Washington Post

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But GM simply has too many factories. They're running at an average of 80 percent of capacity -- not good enough to be profitable, Harbour said. Some individual plants are over capacity, but they can't shift work to underused factories because the assembly lines don't have the technology to switch products.

GM put more modern, automated equipment into Baltimore in 1984 when it awarded the plant the job of building a new type of vehicle. Rival Chrysler had set off a market phenomenon with its newly created minivans, and GM responded by designing the Chevy Astro and the GMC Safari -- slightly smaller versions of its rear-wheel-drive full-size vans.

Baltimore has been building those products, virtually unchanged, ever since.

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"It's still a damn good, dependable van," said Dennis Hellmig, 54, who has worked on the assembly line since 1972. "The people who've got 'em love 'em."

There just aren't many people who want them anymore; fewer than 50,000 of the two models combined were sold last year. Twenty years without a redesign is many lifetimes in the fast-changing auto market. Toyota, Honda and other foreign-based competitors have all but destroyed GM's dominance in North America in that time by rejuvenating products every three or four years. The Safari and Astro vans are truck-based, body-on-frame dinosaurs that safety groups have routinely called unsafe.

Thinly spread across eight brands
Such product loyalty on behalf of a dwindling customer base is another fundamental problem that plagues GM, which has spread itself thin across eight North American brands, said Sean P. McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Mich. "They have so many products they can't keep them all shiny and new, and some can get incredibly old," he said. The Chevrolet Cavalier was essentially 15 years old when it was replaced this year by the Cobalt, he said. "Can you think of a Japanese or foreign company that would wait that long?"

McAlinden, like other analysts, is convinced that GM has to get smaller to survive. That means shedding some of those brands and closing more factories so it can concentrate on stronger products that earn more profit.

"They've got to get down to 18 to 20 percent of the market and dream about bigger days," McAlinden said. That won't be easy. Killing the Oldsmobile brand over the past few years cost about $1 billion and set off a firestorm among dealers, some of whom sued GM. This year, GM Vice Chairman Robert A. Lutz provoked outrage from dealers by suggesting in comments after a speech that the Buick and Pontiac brands might be in trouble. The company has spent weeks promising that the brands are safe.

Closing factories is all but impossible under the UAW contract. Baltimore's shutdown, approved by the union in negotiations in 2003, shows why: The company has orchestrated the closing so carefully that insiders call it "The Immaculate Shutdown." GM built an Allison transmission plant near Baltimore in 2001 to absorb some jobs from the van factory. The company has spent years reducing the workforce by attrition, and has bought out some older workers and is keeping the rest on the payroll as required by the union contract.

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