Reinventing GM

Michigan feels brunt of GM's bankruptcy

State hit with 7 of 14 plant closures, with Oakland hardest hit

Louis Aguilar / The Detroit News

Michigan, which soared the highest during the glory days of the American auto industry, will suffer the greatest under General Motors Corp.'s decision to shutter more plants and shed more workers.

In the latest round of cutbacks, announced Monday as part of GM's historic move to file for bankruptcy, an estimated 8,900 jobs will be lost at GM facilities in Pontiac, Orion Township, Livonia, Flint, and Ypsilanti Township. The cuts will follow the closure of a Grand Rapids stamping plant on Friday that employed hundreds more. Nationwide, GM plans to eliminate 21,000 jobs at 14 plants, plus three warehouses, in eight states.

Michigan's share of the total job loss: 42 percent. And that doesn't count the trickle-down impact on suppliers, stores, real estate and other segments of the state's economy.

Oakland County is the hardest hit, with 6,600 lost factory jobs and three plants.

The total economic impact may not be known for months or even years, Bob Daddow, deputy Oakland County executive, said.

The county is already bracing for an expected $80 million a year drop in property taxes related to job losses and foreclosures through 2012, and the GM plant closing will further exacerbate the financial squeeze.

"I will be going to war," Daddow said. "We will need to make cuts in all departments. We have been doing these cuts all along ... but the worst is yet to come on governmental revenues."

Here's what's in store for Michigan communities on GM's cut-list:

• Livonia: GM is the tidy Wayne County suburb's second largest taxpayer, contributing $474,000 a year to its $54 million in annual tax revenue, said Mayor Jack Kirksey. The Livonia Engine Plant employs about 160 workers, according to GM.

The city already has asked some public workers to take a pay cut, and delayed filling several high-level positions, such as economic development director, to save on labor costs, Kirksey said.

• Ypsilanti Township : At the historic Willow Run transmission plant, where B-24 bombers were built for World War II, 600 workers who made the six-speed transmission were immediately laid off Monday. Another 500 will remain at the massive, 5-million-square-foot facility until December 2010. They make four-speed transmissions.

Taxes paid by the plant make up 4.4 percent of the township's tax revenue, said township treasurer Larry Doe. For Washtenaw County, it generated $3.8 million in annual tax revenue that paid for schools, libraries and other public services, Doe said. Gov. Jennifer Granholm is trying to pitch the plant to potential battery makers and alternative energy manufacturers, Doe said.

"We were the Arsenal of Democracy. Look where we at now," said UAW Local 735 Don Skidmore, a 30-year veteran of the Willow Run plant. "I was angry, I cried, and now, I just feel numb."

• Orion Township: Supervisor Matthew Gibb said closure of the Orion plant will cost the community $600,000 to $700,000 in taxes assessed on property inside the plant such as robotics. The 4.1-million-square-foot plant employs 3,800. It assembles the Pontiac G6 and Chevrolet Malibu

But the plant is in the running to build a small car in the future, said GM spokesman Chris Lee, along with plants in Spring Hill, Tenn., and Janesville, Wis.

• Pontiac: The announcement that GM's Assembly and Stamping plants in Pontiac were on the list piled more bad news on an already struggling city. Pontiac's state-appointed emergency financial manager, Fred Leeb, said the shutdown of the East Assembly Plant will cost Pontiac about one-fifth of its $50 million general fund.

Pontiac collects $5.3 million in property taxes and $3.4 million in city withholding taxes from GM -- its largest taxpayer -- and its workers. Pontiac Assembly makes the Chevrolet Silverado and the GMC Sierra. The plants employ 2,800.

"This will impact the city's business but more importantly it will impact other people and other jobs and other businesses," Leeb said. "We fear that we are going to have to cut even more deeply. And there will be concessions to ask from the (city) unions."

"It's a real sad day," said UAW Local 549 President Doug Bowman. Workers at Pontiac Assembly were told by plant officials that the 3.4 million-square-foot plant will close in October or sooner.

Actually, workers may have just a few weeks in the plant. The plant already is slated to be idled for five weeks starting June 11 to reduce inventory.

The Pontiac Stamping Plant, originally opened in 1926, has been put on standby capacity and will be idled in December 2010.

• Flint: A once-thriving company town, Flint has lost about 50,000 GM jobs since the automaker's heyday about 30 years ago. Powertrain Flint North employs 1,000, and it will close by December 2010. Flint North employs 846 hourly and 166 salaried workers who make engines and component parts.

A task force of local business leaders, educators and public officials has been assessing the situation and is considering alternatives to make up for the expected loss of tax revenue, said Flint Acting Mayor Mike Brown.

"If you're realistic at all, you have to be aware that we'd lose" the Flint North plant, he said. "We have been bracing for this. This is an announcement we've been planning for."

Nonetheless, the city can't predict the full financial impact. Officials are researching options and alternatives, such as redeveloping 1,400 acres of brownfields.

• Grand Rapids: The Wyoming Stamping Plant, in suburban Grand Rapids, closed Friday after 74 years. Its 700 workers made parts for SUVs. Its closure was announced last October.

Staff Writers Robert Snell, Christina Rogers, Jennifer Chambers, Mike Martindale and Jennifer Youssef contributed to this story.