Tuesday, June 2, 2009

Toward a new Great Depression?

YPSILANTI, Michigan (Reuters) - During its finest hour in World War II, the retooled Willow Run car factory here could make an operational B-24 heavy bomber in just 59 minutes.

Sixty-four years later the plant has reached its nadir, as General Motors Corp (GM.N) has announced that it is one of 11 plants slated to close as part of the struggling automaker's efforts to restructure its business.

GM filed for Chapter 11 bankruptcy protection on Monday and should emerge by the end of August as a slimmed-down entity majority-controlled by the U.S. government.

Auto workers at Willow Run have slammed the move to shutter the plant -- which is about 30 miles west of Detroit and makes engine transmissions -- saying the facility is one of GM's best and can operate more cheaply than other U.S. plants.

"Anytime GM has asked us to do anything, we've always stepped up to the plate," said Don Skidmore, president of United Auto Workers union Local 735, which represents some 1,200 workers at the plant. "We have made significant concessions to help make this the most flexible and most modern plant the company has."

"The message is simple: GM has closed the wrong plant."

Parts of Willow Run are already shut down. The rest will close by the end of 2010.

Others argue that by closing plants the United States could use during a time of war, the country is undermining its ability to produce weapons in future conflicts.

Automakers retooled plants in World War II to make planes, tanks and munitions as part of the U.S. war effort, earning Detroit the nickname the "Arsenal of Democracy." That term was first coined by U.S. President Franklin D. Roosevelt in a December 29, 1940 radio address calling for material support for American allies like Britain fighting Nazi Germany, Italy and Japan.

"If we end up in another war, who is going to manufacturer the weapons we need?" asked Pat Sweeney, president of UAW Local 5690 in Orion, Michigan, about 30 miles northwest of Detroit. "People don't realize the repercussions of these closures."

FORD GOT THE JOB DONE

Willow Run's heyday came when it was owned by another of Detroit's storied Big Three automakers, Ford Motor Co (F.N).

The third is Chrysler which, like GM, has ended up in bankruptcy, thanks to an over-reliance on pickup trucks and sports-utility vehicles, the advent of the U.S. recession and a lack of auto loans for consumers amid the credit crunch.

After the United States entered the war following the Japanese attack on Pearl Harbor on December 7, 1941, U.S. automakers like Ford quickly switched over production to weapons from automobiles.

"The automakers rolled up their sleeves, got their hands dirty and converted their production overnight," said Ernie Panizzoli, who repaired plane frames during the Korean War.

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