US General Motors Plant Closes its Doors After 70 years

Leta Hong Fincher
May 18, 2005
Washington, D.C.

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General Motors, GM, recently closed its 70-year-old van assembly plant in Baltimore, Maryland, laying off some 1,100 factory workers. Analysts say there will likely be more plant closures in the future.

Joe Evans has worked at the General Motors plant in Baltimore for 40 years. Now the only employer he has ever known is closing down. He says its feels like mourning the death of a loved one, "It's like your family died because when you go to work and you know these people on a one-on-one basis and know their needs and know that, when you, after the plant closes, when you get up in the morning, you're not coming into the factory."

Mr. Evans is taking early retirement at age 58. But as he gathered with co-workers at a bar two days before the plant closed, Mr. Evans worried about his future.

Expressing his concerns, he says, "I do have concerns down the road that companies are scaling back and re-negotiating contracts and are you going to lose part of your pension, benefits? It's kind of a scary thing; especially when you start to them need them. As you get older, you need more things."

General Motors has the biggest company pension plan in the United States, an obligation of almost $90-billion in 2004, placing a further burden on the company.

General Motors wasn't always this troubled. In the 1950s, most middle-class Americans wanted to drive a GM car. Analysts say GM held more than half of the U.S. automotive market share until the 1970s.

But when Japanese, German and Korean automakers entered the U.S. market, consumers began to turn away from General Motors. Today, GM's market share has dropped to just 25 percent.

In April, the company reported a loss of more than $1 billion for the first quarter of 2005. And credit agencies recently cut the company's bond rating to junk status.

General Motors declined VOA's request for an interview. But Bob Crandall, an auto industry expert at the Brookings Institution research group in Washington D.C., says that the Baltimore plant closure is just one of more to come. "They can't keep the same amount of facilities open if they're going to lose that much market share and it looks like they're going to continue to lose market share, so they have to close plants."

Mr. Crandall says that each time General Motors closes a manufacturing plant; it must spend millions of dollars in compensation and early retirement benefits. But he says the company has no choice, because it is producing cars that consumers no longer want to buy.

Even GM worker Evans acknowledges that the company has to become more competitive. "I hope for my sake and other retirees that they turn this company around and hopefully, with newer products, American people will recognize that GM does build a top quality product."

Auto analysts say that Americans already recognize quality cars, but those cars are most likely to be non-U.S. brands.