General Motors Corp. said Monday it lost a record $4.5 billion in 1991 and announced plant closings affecting thousands of workers, including the assembly plant near Ypsilanti, Mich. A Texas plant was spared.
The announcement came as the automaker posted a fourth-quarter loss of $2.5 billion.Combined with net losses last year of $2.3 billion at Ford Motor Co. and $795 million at Chrysler Corp., the Big Three lost $7.6 billion in 1991. That easily topples 1980 as the worst on record when GM, Ford and Chrysler lost $4.5 billion.
In 1990, the Big Three lost $1.1 billion, and just three years ago, GM, Ford and Chrysler earned $11.2 billion.
Among the GM plants being closed are plants in North Tarrytown, N.Y., and a V-8 engine plant in Flint, Mich. In all, GM announced closings and cutbacks affecting 12 plants.
Texas officials had lobbied heavily to save the plant in Arlington, near Dallas, and Michigan officials had tried to do the same for the Willow Run plant near Ypsilanti, west of Detroit. Both plants make large, rear-wheel-drive cars, which are selling poorly.The Ypsilanti plant is to be closed in the summer of 1993 and has 4,014 employees. The North Tarrytown plant, to be closed in the summer of 1995, has 3,456 workers; the Flint plant has 4,036.
"We're all just in a state of shock right now," said Anthony Caparisi, president of the Ypsilanti Chamber of Commerce.
Al Vickery, a worker at Arlington, said more than 2,000 workers inside the plant for a televised address by GM Chairman Robert Stempel let out a cheer when he said Arlington would remain open.
"You couldn't ask for anything better," Vickery said. "It's a great feeling."
Under their contract, laid-off UAW members at GM are guaranteed 95 percent of their take-home pay through mid-September 1993, when the contract expires.
The losses posted in GM's earning report Monday included a one-time $1.8 billion charge in the fourth quarter to cover the costs of closing some of the world's largest automaker's factories.
GM's losses last year worked out to $4.25 per common share in the fourth quarter and $7.97 per share for all of 1991.
"The rate of change during the past year was unprecedented, and no one was immune to the extraordinary events which affected our lives and the way in which we do business," Stempel said.
GM's automotive losses were offset by profits in its computer services, aerospace electronics and financial subsidiaries.
Electronic Data Systems Corp. said Monday it earned $547.5 million last year, GM Hughes Electronics Corp. reported 1991 profits of $435.5 million, and General Motors Acceptance Corp. made $1.4 billion.
The reason for the huge losses for each of the automakers is simple - they aren't selling enough cars and trucks.
In December, Stempel said 21 plants would be cut, without specifying which. Monday's announcement brings to 14 the number of plants he has specified so far.
Other plants facing closing or cutbacks:
- Moraine, Ohio, engine plant, with 549 employees, will close by summer 1995 and production will be consolidated in Toluca, Mexico.
- Saginaw, Mich., Grey Iron Foundry Head Castings, with 600 employees, will close by summer 1994. Production will be consolidated at the Defiance, Ohio, Casting Plant.
- St. Catharines, Ontario, Canada, casting plant with 2,150 employees will cease operations by spring 1995.
- Another St. Catharines plant will cease production of the 3.1-liter V-6 engine, affecting 165 workers, in 1992. Production of other V-6 and V8 engines will continue.
- Detroit Plants 55 and 57 with 435 employees, who will be relocated to other nearby plants.
- Delco Chassis, Dayton, Ohio, Plant 20 with 249 employees, by the end of 1992. This plant produces machine control systems.
- Delco Remy, Anderson, Ind., Plant 10 with 375 employees. Operations at this plant, which produces horns, are being discontinued by the end of the first quarter of 1992.
- Die Construction at Lordstown, Ohio, with 270 employees. Operations at this facility will cease this year.