By By JESSICA SIEFF / Niles Daily Star
Though many would readily say the news that General Motors would officially file for Chapter 11 bankruptcy Monday was no surprise – the reality of the fall of the auto giant in no way failed to stun those whose livelihoods would ultimately be affected by the "painful toll" President Obama said a future restructure of the company would take.
A painful toll that would be especially felt by auto workers at the heart of the industry, in the state of Michigan.
"There is no escaping that GM's bankruptcy will be devastating for countless Michigan families and communities who have already been pushed to the brink," Congressman Fred Upton said Monday, following the automaker's announcement. "Mothers and fathers, sons and daughters who are their families' breadwinners will soon be without a job."
Analysts say the crumbling of General Motors, which became evident as all three of the nations big automobile manufacturers began losing sales within the thick of the recession, was one that had been coming for some time.
"This is undoubtedly a painful day for General Motors, for Michigan and for the families who depend on GM for their livelihood," Michigan Governor Jennifer Granholm said in a statement. "Although we knew this day was coming, it doesn't make it any easier."
Along with news of the Chapter 11 filing, reports that over a dozen factories will be closed putting many more Americans out of work.
Founded in 1908, General Motors seemed to live a fairy tale existence. It was a force of bold and robust model vehicles, the place that built names and reputations including Cadillac, Chevy and Hummer.
But some say the company's continued expansion, along with other missteps during its lifetime, eventually damaged its own reputation, with so many brands under its label, many industry analysts have said GM's vehicles wound up competing against each other rather than against the competition.
Other skeletons fill the company's closet. There was the United Auto Workers strike in the 1990s that ended in GM's decision to agree to pay workers even when lines were down. The move continues to draw speculation.
A history as large and complex as the company itself … leading to the long walk of bankruptcy.
"Working with my auto task force, GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again," Obama said Monday. "It's a plan to tailored to the realities of today's auto market, a plan that positions GM to move toward profitability even if it takes longer than expected for our economy to fully recover and it's a plan that builds on GM's recent progress in making better cars."
A look at the new GM
The company which announced its entrance into bankruptcy Monday, also announced its hopes for a newly imagined automaker and plans outlined in a statement by GM that include:
Focusing more on four core brands in the U.S. – Chevrolet, Cadillac, Buick and GMC with fewer nameplates and a more competitive level of marketing support per brand.
More efficiently utilizing U.S. capacity while increasing over time the percentage of U.S. sales manufactured domestically.
Provide a higher level of customer service through a more focused U.S. network of approximately 3,600 dealers.
The restructure also includes plans "reducing 2009 salaried employment in North America from its year-end total of 35,100 to approximately 27,200…"
While those at federal and corporate levels try to find the positives in GM's current situation the news is bad for those along the rungs of the auto maker's ladder.
"At the state level, we will do all we can to protect the people affected – from helping those who lose their jobs with unemployment insurance and job training, to assisting those communities that need investments to find new uses for closed facilities," Granholm said.
"We will be aggressive about fighting to keep additional plants and auto jobs, and we'll be even more aggressive in creating new, green jobs in the alternative energy economy."
Early Tuesday morning – GM announced it had a, yet to be named, buyer for its Hummer brand, which they estimate could save up to 3,000 jobs.
"Hummer is a strong brand," said Troy Clarke, President of GM North America. "I'm confident that Hummer will thrive globally under its new ownership. And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker ."
But those who work in tool and die and machine shops that service parts for America's cars who have already been crippled by the drastic slow down in business – now face uncertain terms and possible closing.
"Michigan's families will shoulder much of the burden, but the shock wave will be felt well beyond Michigan and the Rust Belt as thousands of dealers and mom and pop suppliers are forced to shutter across the nation," Upton said.
And dealers aren't off the hook either.
Just last month, after fellow automaker and bankruptcy alum Chrysler slashed its dealer contracts, GM dealers braced for similar fates, many seeing their futures with GM end.
But now that the company has entered into bankruptcy, the automaker can unleash a second wave of cuts with virtually no warning – putting their remaining dealers on edge once again.
One element of good news for GM car owners – warranties, service and support on GM vehicles will not be interrupted by the bankruptcy filing, the automaker said.
Relief for some – but certainly not all.
"I am absolutely confident that if well managed, a new GM will emerge that can provide a new generation of Americans with a chance to live out their dreams, that can out-compete automakers around the world and that can once again be an integral part of America's economic future," Obama said. "And when that happens, we can truly say that what is good for General Motors and all who work there, is good for the United States of America."