Bonus Time at G.M.

Nick Bunkley of The New York Times reports on record-setting bonuses at G.M.

General Motors said on Monday that it would pay the largest profit-sharing checks in its history to 45,000 hourly workers in the United States.

The checks will be worth “upwards of $4,000,” a G.M. spokeswoman, Sherrie Childers-Arb, said. That is more than double the company’s previous record of $1,775, paid in 2000.

About 3,000 G.M. workers at four plants in New York, Michigan and Indiana that were formerly part of the Delphi Corporation will receive about $3,000 each.

A Solution to Flint's Budget Woes

Mt. Clemens, looking suspiciously like Flint, in a photo by John Cruz.

With Mayor Dayne Walling locked in an ongoing battle with police and fire unions over concessions that will help balance the city budget, Mt. Clemens offers a novel approach to fiscal solvency:

A Michigan city is pleading with churches, schools and a hospital for donations to help cover its staggering budget deficit, reports Nick Bunkley of The New York Times.

The mayor of Mount Clemens, Barb Dempsey, sent a letter this week to 35 tax-exempt organizations asking them to voluntarily contribute to the city’s general fund, which pays for services like fire protection, streetlights and roads. Ms. Dempsey said the city has already drastically cut its expenses, having disbanded the police department six years ago, but still faces a $960,000 deficit that is projected to reach $1.5 million next year.

“Those are all services that they utilize at no cost to them,” Ms. Dempsey said. “We figured it can’t hurt to send out letters. If you don’t ask, you never know.”

The Fate of Flint's Empty G.M. Factories

G.M. and Flint had a lot of good years together, but the breakup was brutal. And like many once-passionate relationships, this one is ending in the worst possible way...at least for Flint. Bill Vlasic and Nick Bunkley of The New York Times report:

When American taxpayers bailed out General Motors, the company was split, with the best assets going to the reorganized automaker of the same name. This new General Motors is selling cars, making money and preparing a public stock offering.

The least valuable assets, including the run-down factories in Flint, were left in the shell of the old G.M., now named the Motors Liquidation Company.

This company has filed a bankruptcy reorganization plan that lays out how it will clean up and sell off the dozens of unwanted pieces of what was once the world’s largest automaker.

But the process is slow, and while plant closings have already cost jobs and tax revenue in many communities, the empty factories themselves are now becoming a burden.

“When General Motors closed shop in Flint, they just turned the lights off,” said Chris Swanson, a captain with the Genesee County Sheriff’s Department, which has made nearly two dozen arrests this year at the Flint North complex on charges of theft, assault with intent to murder and others.

Given all the crime in the area, one might wonder why local law enforcement is bothering to protect the plants G.M. has left behind.

Is Hummer Dead?

Hummer appears to be history, but as we saw with Saab it may not be dead yet.

Nick Bunkley of The New York Times reports:

Hummer, the brand of big sport-utility vehicles that became synonymous with the term “gas guzzler,” is being shut down after a deal to sell it to a Chinese manufacturer fell apart, General Motors said Wednesday.

G.M. said only that its planned sale of Hummer to the Sichuan Tengzhong Heavy Industrial Machines Company “cannot be completed,” without giving a reason, but the $150 million deal had been stalled as the companies awaited approval from the Chinese government. G.M. had been trying to sell Hummer for a year, and struck a preliminary deal with Tengzhong last June.

G.M. Payback Starts Early

G.M. has already started repaying its government loans.

Nick Bunkley of The New York Times reports:

G.M. said it increased its cash reserves by $3.3 billion from July 10 to Sept. 30, ending the quarter with $42.6 billion on hand. It plans to make a $1 billion payment to the United States government in December, more than five years before the loans are due, and to submit similar quarterly payments after that.

G.M.’s chief executive, Fritz Henderson, said the automaker’s performance showed “some signs of progress and some signs of stability” and a “good, strong liquidity position.”

Speaking at a news conference at G.M.’s headquarters, Mr. Henderson said the loss was “much lower than what it has been and certainly better than our plan going into bankruptcy, but nonetheless it’s a loss and you can’t be satisfied with it.”

For the entire third quarter, including the final 10 days of G.M.’s bankruptcy, the company said its revenue was $28 billion, up 21 percent from the second quarter.

Excluding taxes and one-time items like the costs related to restructuring its dealership network, G.M. said its operations lost $261 million from July 10 and Sept. 30. The loss in North America was $651 million, while international operations reported a profit of $238 million.

Buick North: The Last Holdouts

One of the many memorable vehicles produced at Buick City. (Photo courtesy of papajim).

Last month, readers reviewed what's left of Flint's auto factories. Today's New York Times has a portrait of the "Last Holdouts" at Buick North.

Bill Vlasic and Nick Bunkley report:

All that is left is Flint North, which built more than 20 million of G.M.’s 3800-model V-6 engines until production ceased last August. Some workers are removing equipment and preparing to start building four-cylinder engines for the Chevrolet Volt and Cruze at a newer plant across town next year, while others still build torque converters, gears, pistons, shafts and other powertrain components.

The plant is surrounded by crumbling and empty buildings, and dead-end streets that once led into Buick City. It is a neighborhood of boarded-up stores and near-desolate streets, with the exception of the overflowing parking lots on Sundays at the Baptist churches along Industrial Avenue across from the plant.

The last 450 workers feel fortunate to have another factory to go to, having seen too many friends and relatives laid off over the years.

“General Motors has taken good care of me,” said Mike Stoica, 60, who started at G.M. fresh out of high school in 1967. “I’ve had a good life for not having a college education and doing something I love to do.”

That way of life is vanishing at G.M. plants across the United States, but no city has been affected like Flint. When Buick City was at its peak production in the mid-1980s, G.M. had 80,000 workers spread across the city. Now it is down to about 5,000, a number that could fall more in a bankruptcy.

“People talk about closing a plant,” said Bill Jordan, president of U.A.W. Local 599 and a 32-year G.M employee. “We closed a city here. Everything that any city had, we had here.”

June swoon

Nick Bunkley of The New York Times reports on the dismal June auto sales figures:

"Sales fell 28 percent at the Ford Motor Company, 21.4 percent at the Toyota Motor Company and 18.2 percent at General Motors in June, the worst month yet in a miserable year for the automobile industry."