Friday, December 26, 2014

Auto industry restructuring puts Delaware out of the assembly business

The First State has been making cars and trucks for more than 50 years. But General Motors will close its Wilmington-area factory in July.

Auto industry restructuring puts Delaware out of the assembly business

As of next month, Delaware will be out of the auto assembly business

It’s been a remarkable run for a state better known for financial services and chicken farms than Detroit’s latest wheels.

Delaware’s two auto plants endured while aging factories in New Jersey were shuttered earlier this decade. But after the auto industry’s head-on collision with the global financial crisis and recession last year, you knew that the First State wouldn’t walk away unscathed.

Yesterday, General Motors Corp., kept alive by billions in government loans, not only filed for bankruptcy, but also announced it would close 14 factories by the end of 2010, including the one outside of Wilmington that makes the Pontiac Solstice and Saturn Sky convertible and coupe.

From 30,000 feet, these are steps long overdue for a bloated enterprise that seems to have made all the wrong moves for the better part of a generation.

Still while I applaud that hard decisions are being made now, it doesn’t soften the blow being felt by the 550 people who work at the GM plant on Boxwood Road that will close in July.

For them, there’s no driving down I-95 and applying for work at the Chrysler factory in Newark, Del. That plant closed in December, throwing 1,100 people out of work. In fact, there’s no safe place to move to chase auto industry jobs right now.

Certainly, not in the Northeast. Last August, Mack Trucks Corp., once so dominant in Allentown, said it would move its world headquarters where 680 work from Pennsylvania to North Carolina.

Last week, Visteon Corp. , a major parts supplier to Ford Motor Co., filed for Chapter 11. Visteon, which has roots in the Philco radio company that started in Philadelphia, still employs 280 at its factory in Worcester Township, Montgomery County, that makes electronics for all sorts of vehicles. It has survived for now.

Pontiac and Saturn did not, and that meant GM’s 62-year-old Boxwood Road plant could not. While you can’t help but lament the loss of another manufacturer, let’s remember that the sporty cars it was making weren’t big hits with consumers.

Shrinking may be what’s good for GM right now, even if it’s not good for Delaware.

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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