GM cuts Wentzville shift, 887 jobs

One week after getting word that their assembly plant was safe from closure, nearly half of the workers at General Motors Corp. plant in Wentzville learned they were not safe from a layoff.

GM told workers Monday that it will eliminate one of two production shifts at Wentzville starting Aug. 10, as the automaker realigns output with bloated inventories and weak van demand. A total of 887 hourly workers will lose their jobs.

This marks yet another blow to auto manufacturing in the St. Louis area — which once rivaled Detroit’s auto hub and now, after Chrysler closes its Fenton plants this year, will fall to just one shift of production at GM’s plant.

GM filed for bankruptcy protection June 1 and identified 14 plants and three distribution centers it plans to close by December 2011. Wentzville’s operation was not among them.

The automaker employs more than 1,800 hourly and salaried workers at the St. Charles County location, which is the only facility to make GM’s full-size vans, the GMC Savana and Chevrolet Express. In the past few months, analysts have said that product lineup has saved the plant from major cuts or closure.

But orders for these vehicles have slipped, and GM does not expect demand to recover anytime soon. For now, there is no recall date for the laid-off workers.

"While we certainly hope the market rebounds for the vans, we are not in a position to predict what the market will do," said Chris Lee, a GM spokesman.

Wentzville Mayor Paul Lambi remained hopeful that the jobs will come back.

"The fact they are keeping (the plant) open means they believe they will have two shifts again in the future," he said.

AREA EFFECT

Workers learned of the cuts by watching a video during their shift Monday. As Nancy Markovich watched, her thoughts went to her three young children.

"How am I going to support my kids?" said Markovich, a single mom from O’Fallon, Mo., who turns 35 today. She has been employed with GM in Wentzville for nearly 10 years.

"I have a house payment. I need to make sure they have medical care. I haven’t had time to think about this," said Markovich, who works on engines.

Although he’s safe from the cut, Glenn Andersen, 59, of Lake Saint Louis, said he is considering a buyout offer from GM.

"I feel the people that need the jobs have little kids," said Andersen, who also works on engines. "I’m ready to do something else with my life."

Beyond the direct layoffs in the plant, these losses can create a ripple effect throughout the community.

They cause additional layoffs at nearby parts suppliers and lead to less revenue at area restaurants and small businesses supported by the workers. Calls to several suppliers were not returned Monday.

As part of GM’s previous plans to slim down inventory, the Wentzville operation already was scheduled to temporarily halt production starting this week through July 26. That extended summer shutdown still will happen.

Only workers on the first shift, the morning production shift, are scheduled to return on July 27, but both the first and second shifts will return for the week of Aug. 3, Lee said.

Layoffs will start the following week, on Aug. 10.

GM originally planned to slow the production speed this summer by reconfiguring the assembly line, which would result in an estimated 250 to 300 workers losing their jobs.

Those plans have been "overruled" by the decision to cut one production shift, Lee said group health insurance. The plant will continue to make 38 vehicles per hour.

Tom Brune — a representative for United Auto Workers Local 2250, which represents most of the plant’s work force — said workers knew about possible production adjustments, such as additional weeks of temporary shutdown and slower line speeds, but they had hoped GM wouldn’t resort to a shift elimination.

The cut is "not a total surprise … but certainly not the way we would have preferred," he said.

All of Wentzville’s UAW members will receive a combination of state unemployment and supplemental unemployment benefits from GM during the extended shutdown. Second-shift workers will continue to receive these benefits once their shift is cut.

TURNAROUND TIME

GM’s Wentzville plant has been open since 1983 and started assembling vans in 1995.

Like the rest of the auto market, sales in the full-size van segment have taken a hit. U.S. sales for this niche group — the Express, Savana, Ford E-series and Dodge Sprinter — declined 24 percent last year to 248,619 vehicles, according to J.D. Power and Associates Forecasting.

GM’s Savana and Express products account for 40 percent of the full-size van market. Most of the vans made in Wentzville are cargo vehicles, used for delivery or repairs. Others are modified into ambulances or moving vans, airport shuttles or fancy conversion vans for family travels.

Most of these uses, analysts have said, are not recession-proof.

From January through May, U.S. sales of the Express and Savana combined fell to about 27,640 vehicles, down 37 percent from the same time in 2008.

"This will mark the first time the Wentzville plant has gone to one shift since we started building vans, and it will be a hardship for many of our members both laid off and working," UAW Local 2250 said in a statement Monday. "We are hopeful that sales will rebound with the overall economy in the second half of the year and look forward to calling back all of our members."

Auto production analyst Haig Stoddard predicts a turnaround will take longer.

Stoddard, of IHS Global Insight, estimates GM will make about 59,000 Savana and Express vans this year — fewer than half of the vans it built in 2008.

Even in 2010, Stoddard predicts, GM will produce about 93,000 full-size vans — still doable on one shift with overtime pay.

"I would guess the Wentzville plant wouldn’t have to go back to a two-shift operation until 2011," he said.

Automakers and analysts consider a one-shift plant to be financially inefficient.

Chrysler’s plants in Fenton, for example, faced that pattern. When minivan sales slid, Chrysler cut one of two minivan shifts at the start of 2008 and idled the plant in October. It also cut one of two shifts at the Dodge Ram plant in September 2008, and announced last month that it would close the pickup plant by the end of this September.

However, the move to one shift does not necessarily make Wentzville more vulnerable to a permanent closure, Stoddard said.

He thinks it’s unlikely that GM will exit the van market or take the expensive step of retooling another plant to build these vehicles.

Steve Giegerich of the Post-Dispatch contributed to this report.

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