GM Cuts to Affect Thousands of Workers
LIANE HANSEN, host:
General Motors announced today that it will cut 30,000 jobs and close nine plants in North America over the next three years. The news comes as no big surprise. The auto industry in America has been struggling with high pension costs and declining demand for its vehicles. But as the auto industry adapts to ever-increasing global competition, what does it mean for the people who lose their jobs? Joining us now is Micheline Maynard. She's the Detroit bureau chief for The New York Times and author of "The End of Detroit: How the Big Three Lost their Grip on the American Car Market." And she joins us by phone from her office in Detroit.
Welcome to the show.
Ms. MICHELINE MAYNARD (Author, "The End of Detroit"): Thanks very much for having me.
HANSEN: So who are the people who are going to be losing their jobs as a result of this announcement? How old are they and what kind of jobs do they do?
Ms. MAYNARD: Well, General Motors' average worker is about 49 years old and a lot of those people have close to 30 years in at the company. There's a program at GM that allows people to retire after 30 years, but, you know, these are some very well-paying jobs. People at General Motors make about $27 a hour. They have a very generous pension and health-care plan, and I'm sure some folks who've even thought about retiring have looked around and said, `I don't think I can find anything this good anywhere else,' and that has kept a lot of people at the company from leaving that I think, you know, gee, I might have liked to seen go by now. So the only option for the company is to just close entire plants and get rid of those work forces.
HANSEN: The average age, you say, is 49?
Ms. MAYNARD: Yes, that's right. I mean, these are the kind of jobs that people had right out of high school. Maybe your father worked at GM or your uncle or your brother, and you know, you got a summer job there and then just stayed on. In fact, I'm not really that old, but I do remember how high school classmates who--went to work in the plants instead of going to college because they were very well-paying jobs. So easily there are, you know, baby boomers at GM that are hitting retirement age in sort of the GM world.
HANSEN: In the GM world. But this is a young age actually to retire. What do you think these people are going to do? Are there other jobs available?
Ms. MAYNARD: Well, one of the problems is that there certainly aren't assembly jobs like these. I mean, this--I always call these the Cadillac of jobs in industrial America. These are very well-paying jobs. If you look at wages and benefits, it comes out to about $64 an hour, including the value of the health-care plan and the pension plan. And you know, most industrial jobs today are paying 10, 11, $12 an hour, so they probably will not be able to find equivalent work to this kind of a job.
HANSEN: Those who choose to retire, though, do they have enough money to retire?
Ms. MAYNARD: Well, they do get a pension plan, and what happens when--under the UAW contract, there are usually deals that are cut to protect the workers. They'll get things like tuition assistance. They might get relocation assistance. They might get a flat sum of, you know, thousands of dollars to retire and then they'll get their health care and their pension that they're normally allowed to get. And with that, they could go out and find other careers, if they chose to.
HANSEN: Are there other careers available out there, or will they have to relocate?
Ms. MAYNARD: Well, some people might have to relocate. I mean, the plants that are being closed by GM--and I do want to say that most of the plant closings don't take full effect until 2008, but they are located all over the country. There are people in Oklahoma City and people in Tennessee, and there is one plant, a small plant, in Michigan that's closing. There's a plant up in Ontario that will close actually. So that--in Doraville, Georgia, outside Atlanta. So they're kind of scattered all over the country.
HANSEN: What's the fallout then in those communities?
Ms. MAYNARD: Well, it depends. I mean, Doraville is outside of Atlanta, and I can't imagine that there'll be a huge impact on the city of Atlanta from the GM plant closing. But it's a source of pride for a lot of these communities to have a GM plant, have a big auto plant, and you have to remember that a bunch of these plants opened in the early 1950s and so they've been part of their communities' fabric since that time.
Up in Canada, I think the situation's a little bit different because the Oshawa factory that's closing it outside of Toronto, and that's part of a big manufacturing complex. So it's just a piece of it. It's not like this is the one plant that people worked at in a small town. Most of these plants are located outside of large communities.
HANSEN: But again, in large communities doubtless there will be some fallout in the businesses that actually act as support systems--I mean, restaurants, shop owners, things like that.
Ms. MAYNARD: That's right. And the estimate has always been that five or six jobs stem from every auto job, so you'll have an impact on, you know, the places where people go to eat and drink; you'll have an impact on the suppliers that feed these plants. You'll have an impact on school systems, especially if people pull up stakes and move away, if the tax base evaporates. So you know, it's just more bad news out of Detroit.
HANSEN: This latest round--it's not really a surprise, is it? These things people knew were coming.
Ms. MAYNARD: No. General Motors had indicated in June that they expected to cut about 25,000 jobs and some of these plants--you know, Oklahoma City is really far from Detroit, from sort of the center of the supply network. And some of these factories are building vehicles that aren't selling very well, and so you kind of saw the handwriting on the wall.
HANSEN: Was any effort made to--I don't know--prepare for it?
Ms. MAYNARD: The UAW has been in negotiations with GM for quite a while on this, and actually this will be the subject of negotiations again in 2007 when the national contract comes up for a new agreement, and at that time there will be sort of a going away package negotiated for the workers who are losing their jobs.
HANSEN: Is worse news to come, do you think?
Ms. MAYNARD: Yes, I do. I actually was doing some calculations today and if you look at what GM will have left, they would be able to hold about 28 percent of the American car market, and right now they're selling about 26 percent, so there may have to be some more cuts unless they can turn it around and sell some vehicles that Americans want to buy.
HANSEN: Thanks for joining us. Micheline Maynard is The New York Times Detroit bureau chief and author of "The End of Detroit: How the Big Three Lost their Grip on the American Car Market." She joined us from her office in Detroit.
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