GM and Ford: Examining the potential losses and looking toward the future
General Motors announced in November that it would cut thousands of jobs and close several manufacturing plants across America, including the 157-acre plant in Doraville, located just inside I-285, near the intersection of I-85. On Monday, Ford announced it too would cut several thousand jobs and close 13 plants nationwide, including the 2.8 million square foot plant in Hapeville. The state was prepared to offer $88 million in incentives to Ford to expand the facility before the announcement.
This one-two punch comes on the heels of a crippling combination of bad economic news for Atlanta and Georgia, including the sale of Georgia-Pacific and Scientific-Atlanta; the cuts at Bellsouth; and, the bankruptcy announcement by longtime Atlanta titan Delta Air Lines. Listed below are some numbers the reader should consider:
-The GM Doraville plant now employees over 3,000 workers.
-The GM plant accounts for 10 percent of the city’s (I assume city here means Doraville) tax revenue and is responsible for between $800,000 and $1 million in property taxes and fees.
-Just three years ago, GM spent $150 million to retrofit the Doraville plant for van production.
-The Ford Hapeville plant employees 2,100 workers, paying them $100 million per year as a group.
-In 1995, manufacturing jobs numbered 587,604. Today that number is 441,300. That number will obviously continue to decline.
(Sources: The Atlanta Journal-Constitution and Atlanta Business Chronicle)
The AJC reports the Doraville plant will close no later than 2008 and also reports that the Ford plant will close as early as August, after the last of the once mighty Taurus line finishes production.
Looking toward the future, the Doraville City Council will meet at 3:30 p.m. on Friday to consider an annexation proposal. The Council will decide whether to extend the northern boundary of Doraville to the Gwinnett County Line, according to the AJC. DeKalb County Chief Executive Officer Vernon Jones is working with GM officials in Detroit to keep the plant open. Jones said he envisions a development that is “bigger and better than Atlantic Station” on the property, referring to the commercial and residential development in Midtown Atlanta.
While the closure of these two plants is a serious concern, there could be a silver lining. For many years, the state of Georgia has failed to bring foreign automakers to the state. The AJC reports that Kia, the South Korean automaker, is testing soil samples at a site along I-85 in West Point. While state officials are mum on the issue, Kia could be close to announcing plans to build a $1 billion plant that would create 2,000 jobs. Kia is also examining sites in LaGrange and in Tennessee and Mississippi. Alabama, South Carolina, Tennessee, and Mississippi all have foreign automaker plants within their borders.
There will no doubt be moves to save the plants, as indicated by Vernon Jones’ trip to Detroit, but I doubt those jobs will be saved. It should be interesting what new developments sprout (or don’t’ sprout) on the Doraville and Hapeville sites. Here are some questions to consider: Could another mixed-use development like Atlantic Station be on the way in Doraville? Will Georgia finally land a Kia manufacturing plant? And if so, will more foreign automakers follow suit, thereby possibly offsetting the GM and Ford losses?