GM Playing Own Plants Against One Another?
By Bill Visnic June 15, 2009By Bill Visnic
The political and financial jockeying has started among three General Motors Corp. assembly plants in competition to win the job of building a new generation of compact cars sometime around 2011.
And there is criticism GM -- currently in bankruptcy and earmarked to be more than 60 percent owned by the U.S. government -- is using the promise of the new work to coerce additional tax dollars from the three states hoping to prevail.
The company reportedly has been offered $44 million in long-term tax abatements from the township of Orion, Michigan, site of one of the three competing plants. Countering that are reports GM suggested to Tennessee governor Phil Bredesen the company might choose to build the small cars in the GM plant in Spring Hill -- if the state coughs up $200 million.
And the Associated Press reported Wisconsin Governor Jim Doyle as confirming the state also made "a pretty unique offer" to lure GM to build the new small cars -- in volumes up to 160,000 annually -- at GM's currently shuttered assembly plant in Janesville.
Some citizens and politicians, citing GM's ongoing subsistence on the government dole, are crying foul.
"Tennessee, can you spell e-x-t-o-r-t-i-o-n? Isn't that what's really going on with the $200 million-plus 'incentives' GM and the UAW want from the state to build their small car project in Spring Hill?" asked one poster to Gannett's Tennessee online news network.
"The state of Tennessee is not in any position to be handing out millions of dollars to anybody," insisted Representative Ty Cobb (D-Columbia).
But Tennessee's Fox 17 News in Nashville quoted Spring Hill mayor Michael Dinwiddie as countering, "That's the way they play the game and that sounds like a lot of money. But in reality when you look at the cost to re-tool those plants -- it takes about $25 million dollars to retool Spring Hill and about $200 million to re-tool Orion."
Michigan Governor Jennifer Granholm was quoted as saying the state wants the jobs and will be aggressive in pursuing the new work for the Orion plant, currently running out production of the midsize G6 sedan/coupe/convertible for the soon-to-be-discontinued Pontiac brand and used for spillover production of the Chevrolet Malibu.
GM chief executive Fritz Henderson said the company will decide by the end of June which plant will be awarded the new production.
Photo by GM
1. Assembly plant in Orion Township, Michigan, which currently builds soon-to-be-discontinued Pontiac G6 lineup and Chevrolet Malibu.
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