GM Plant In Louisiana Likely To Close
Thu, 02/25/2010 - 12:45pm
Alan Sayre, AP Business Writer

SHREVEPORT, La. (AP) -- The General Motors assembly plant in Shreveport, La., hit the road to probable closure Wednesday with GM's announcement that a proposed sale of the commercial Hummer to a Chinese company had fallen through -- and the brand would be discontinued.

Last year, the Shreveport plant was marked to be shut down no later than June 2012 as GM got government aid, underwent bankruptcy reorganization and emerged as General Motors Co. The plant is owned by Motors Liquidation Corp. -- actually the old General Motors Corp. -- that is in charge of disposing of GM's unwanted assets.

The plant once employed about 3,000 people, but that payroll has been reduced to about 950. Assembly of the Hummer H3 and the H3T pickup was halted Jan. 19 pending completion of the proposed sale of the brand to Sichuan Tengzhong Heavy Industrial Machines Co. Ltd.

But GM said Wednesday that the Chinese company had been unable to complete the sale.

"GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner," said GM vice president John Smith.

Tengzhong pulled out of the deal because it was unable to get clearance from Chinese regulators within the proposed deal's timeframe, the manufacturer said in a separate statement.

In the meantime, the Shreveport plant will continue assembly of the Chevrolet Colorado and GMC Canyon pickup trucks until its closure, which could come sooner than June 2012, depending on buyer demand for the trucks.

Plant worker Alex Santana, a 17-year veteran of the Shreveport operation, said the end of Hummer "is going to hurt a lot of people."

"There's a lot of jobs going down the drain," Santana said.

Doug Ebey, president of the United Auto Workers Local 2166 and a 28-year worker at the plant, said the proposed Hummer deal "was a little glimmer of hope we had."

"It's going to be tough for the city of Shreveport," Ebey said. "I wish there was more of a public outcry. This place will be missed once it eventually closes. It provides good-paying, union jobs."

The plan with Tengzhong had called for the Shreveport plant to continue producing the H3 model and H3T pickup truck on a contract basis until June 2011, with a one-year option until June 2012.

The larger H2 is made under contract with South Bend, Ind.-based AM General LLC, which also makes military versions of the Hummer.

Ebey said he did not know how the Hummer shutdown would immediately affect plant employment.

In a statement, Gov. Bobby Jindal said his administration was "absolutely committed to pursuing every possible option to save these jobs." He said Motors Liquidation had promised to work with the state to identify other companies that could use the plant -- and the state would use its "mega fund" -- designed to provide financial incentives for companies to locate and expand in Louisiana -- to secure a new project.

In a telephone interview, Stephen Moret, head of the state economic development agency, said the state had three scenarios involving using the plant for automotives and several that would not involve vehicles.

Moret said the state had foreseen Hummer as an anchor tenant for a plant that would serve other automotive businesses. Unless another buyer emerges for Hummer, he said the state likely would focus on using the plant for a single large project, preferably in the automotive industry.

"It would be extremely premature for anybody to dismiss the future of that plant," Moret said.

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