NEW ORLEANS (AP) — Amid the rubble of the General Motors crash and federal bailout of 2009 are 89 orphan GM properties — including the GM plant in Shreveport — for which a special trust is trying to find a future.
Only the Shreveport plant still produces vehicles — and that's scheduled to end by mid-2012.
Although state officials haven't given up on getting the new General Motors Co. to change its mind and keep the plant open, time is running short. The economy appears to be softening, unemployment is high and GM says it already has excess manufacturing capacity.
Stephen Moret, state economic development chief, said his top priority is for GM to produce a new vehicle in Shreveport. But he says auto sales must climb to make that a reasonable possibility.
Amid signs of a slowing economy — with some economists raising the recession specter — GM recently said the auto industry may not reach an overall 2011 target of 13 million car and trucks sales in the United States, though chairman and CEO Dan Akerson told an analysts' conference the company is sticking with that sector-wide goal for now.
In the meantime, the company said it can handle demand for 16 million vehicles annually with existing plants on three shifts. GM currently has 19 to 20 percent of the U.S. market share.
Diana Tremblay, the company's global chief manufacturing officer, said increased demand could be handled with additional shifts, overtime and speeding up production lines. She said the company has a closed plant at Spring Hill, Tenn. — once the manufacturing site for the discontinued Saturn brand — if demand continued to shoot up.
"If we find we are short of something, we can quickly get that plant started up," Tremblay said.
Rebecca Lindland, research director for IHS Automotive in Lexington, Mass., said her firm is projecting 12.7 million vehicle sales this year and around 13.5 million next year — but those figures are under review and may be cut.
"The problem is that consumer confidence is so unstable right now," Lindland said. "The consumers are putting off large purchases and a car would certainly qualify as a large purchase."
The Shreveport plant, with about 800 workers left from a one-time payroll of about 3,000, is losing its GM mission. It once built the commercial Hummer, but GM dropped that line. The small pickups it now builds are not in high demand.
The plant isn't even owned by the new General Motors Co.
Ownership, along with other unwanted GM properties, shifted to Motors Liquidation Co. — commonly known as "the old GM" — in 2009. The RACER Trust — Revitalizing Auto Communities Environmental Response Trust — was formed on March 31 to sell those properties — but not to just anyone, as is typical in a liquidation.
"Unlike a receiver in a typical bankruptcy, the trust has been given a mandate and has been given resources that a receiver doesn't usually get," said Bruce Rasher, redevelopment manager for the Ypsilanti, Mich.-based trust. "Our mandate is to help the communities that were adversely affected by the shutdown of GM plants."
The trust already has cut deals to sell former GM facilities in Pontiac and Wyoming, Mich., and Parma and Moraine, Ohio.
Rasher said the trust has had some offers and expressions of interest for the Shreveport plant, but none were solicited by RACER.
"The trust is abiding by the interests of the community in retaining GM," Rasher said. "Those offers and expressions of interest are being held in abeyance until such time that GM notifies us that it is terminating its lease."
GM has until Sept. 30, 2012, to decide what to do in Shreveport. It can end the lease, extend the lease — or actually buy the plant back. "If new GM wants to continue to operate, the trust will work with the community to bring that to fruition," Rasher said.
Rasher did not give a figure for GM's lease, but called it a "nominal payment" since GM is still paying property taxes and upkeep on the plant.
Moret said the state is working on contingency plans if GM sticks with the plan to shut the plant. He said the plant could become a multitenant manufacturing plant, although that's not "the optimal solution."
"We also have talked with a number of other prospects for the facility, but we're reluctant to go with those as long as there's a possibility of the GM option," Moret said.
Rasher said a buyer for the property, according to the trust's mandate, has to be considered on six points: purchase price, job creation, restoring the tax base, the buyer's reputation, whether the proposed reuse of the property would interfere with environmental cleanup and the wishes of the community.
The trust has $500 million to clean up environmental problems associated with the plants. But Rasher said a strong point for Shreveport is that federal and state environmental regulators have found no problems and the trust didn't have to budget any of its cleanup money for the plant.
Moret said the trust has money to cover such costs as maintenance, security and property taxes for a few years — but any money to overhaul the plant would have to come from the state. He said he anticipates the cost would be less than $50 million. Any state incentives would be tied to the number of jobs created, he said.
"The state already is committed to the cost of getting the facility back to the control of GM," Moret said.
But finding another automaker to take over the plant doesn't seem to be in the cards.
"The facility is really quite modern, but it's structured to be a GM facility," Moret said. "Other automakers have their preferred layouts for their plants."