GM to End Blazer/Jimmy Production and Close New Jersey Plant
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Closure of Plant Ends 67 Years of GM Production
Less than a month after announcing that its rear-drive Astro and Safari mid-vans would be discontinued and the Baltimore plant that builds them shuttered, General Motors is ending production of another “classic” duo, the Chevy Blazer and GMC Jimmy, and closing the Linden assembly plant that produces them.
Sales of the now outdated sport utility vehicles have been on the decline lately, and with no replacement planned, no alternative vehicle to substitute it at the 67 year old New Jersey facility, and a current need for GM to downsize operations in order to meet financial targets, the end was inevitable.
All salaried workers at the plant have been recommended to seek jobs at one of GMs other locations, but that only makes up 110 out of 1,760 workers. The remaining 1,650 hourly employees will be looking for work outside of GM. GM has been paring down staff as sales have been dropping off, and it will most likely shut down the operation ahead of the original summer of 2005 final date, according to a Detroit News report.
GM spokesman Stefan Weinmann, however, denied any early shutdown, stating that while there have been and will continue to be temporary shutdowns due to lack of demand, that his employer has not changed the original scheduled date to shutter the facility.
Sales of the Blazer and Jimmy have been so slow that shutdowns have been numerous, with an average of two weeks of production for every month this year.
“Were adjusting manpower to current production,” Weinmann said. “We have to react.”
Just how slow are they? Well, no Jimmys have been sold in the United States this year, down from just 52 sold through October in 2003. Instead, the outgoing GMC has been sold in Canada along with the Blazer. The Blazer has done much better in the U.S., which wouldnt be difficult, yet demand is down 27.5 percent this year, to 31,271 units sold through October.
Initially when the new Chevy TrailBlazer and GMC Envoy were introduced, their two smaller, less refined predecessors were to be cancelled, but GM saw a market for the less expensive SUVs and therefore production continued and the plant stayed open for about 3 years, as of this date.
The Linden facility, opened in 1937, housed a total of 2.6 million square feet of floor space. It dropped its second shift in 2002, when sales of the aging sport utilities began to wane. Reports cite the plants location, outside of the majority of supplier hubs, its age, GMs current eroding market share and a general economic slump as reasons behind the plant closure, emphasizing that the move was not a result of the quality or skill of the Linden workforce.
So when was the last time GM shut down an assembly plant? The year was 1999, the place Flint, Michigan and the facility the Buick City complex. The closure brought international scrutiny, much in part to a film made by controversial documentary maker Michael Moore, called “Roger and Me”, name for previous GM CEO Roger Smith.
Obviously GM will make sure not to be at the brunt end of such public criticism again, and work with displaced employees to assist in replacement, either within the GM family or outside.
Still, no announcement has been made as to what will happen to Lindens hourly workers once production ends next summer, or before. It is possible that they could be put on indefinite layoff, which would mean employees would continue to receive upwards of 95 percent of current wages for an as yet to be determined period of time. There will also be many Linden hourly workers who will be eligible for retirement.
Despite the need to uproot from a community where family ties and friendships would be as difficult to leave as personal investments in real estate, Linden workers could relocate, to any number of GM facilities. For instance, while the outdated Linden and Baltimore plants are about to fall to the axe, the automaker has been modernizing other assembly plants closer to suppliers in the mid-west, such as the Lake Orion, Lordstown, Ohio facility and Fairfax, Kansas plant, undergoing major revisions for the production of the Epsilon car family including the Chevrolet Malibu and Pontiac G6, and now the new compact Delta based Chevrolet Cobalt and Canada-only Pontiac Pursuit.
All-new plants include the Lancing Grand River Cadillac facility, and in 2006 GM plans to open a new flexible facility in Delta Township, just outside of Lansing, for production of its new line of SUVs and crossovers.
While market share is eroding, having dropped slightly this year from 27.7 percent in November 2003 to 27.5 today, and health care costs, plus retirement benefits are eating away at the companys bottom line, GMs financial arm has been raking in profits, keeping the automaker in the black. Actually, GM saw a $440 million Q3 2004 profit due to its financial division, General Motors Acceptance Corp, despite losing $130 million during the same period in global automotive operations. The Generals North American automotive operations lost $22 million.
No doubt GM will continue to look at opportunities to streamline operations in order to reduce running costs, most likely through simple attrition and allowing some contracts with outside suppliers to phase out. It is entirely possible, however, that further cuts could include further plant closures, more slow-selling model being discontinued, and a more aggressive campaign to reduce the price it pays suppliers for components.
The end of Blazer and Jimmy production will mean the end of a 35 year model run. Both models changed significantly since their 1975 introductions, initially based on shortened full-size pickup truck frames with removable fiberglass integrated rear roof sections. The original Blazer and Jimmy, often referred to by their K5 code name have become popular with off-road enthusiasts due to their tough, go anywhere 4×4 capability and large accommodating dimensions. The K5 models were joined by smaller, S10 compact pickup based versions in 1983. An updated S15-based Blazer and Jimmy debuted in 1995, which continues virtually unchanged as todays 2005 model.
GM has announced no plans to replace the off-road capable models once production ends, but will count on the new car-based Chevy Equinox and upcoming Pontiac Torrent, plus other new models, to deliver the sales numbers Blazer and Jimmy once enjoyed.