BEDFORD — The political meetings, media debates and business analysis meet reality at places like 105 GM Drive.
That’s the address of Bedford’s GM Powertrain plant. Any decisions Washington politicians and industry leaders make about helping the U.S. auto industry will hit home there and in other factories across the country.
In separate interviews, John Lancaster, the plant manager, and Scott Moore, president of Local 440 of the United Auto Workers, say the industry isn’t looking for charity.
“Low-interest loans, that’s what we’re after,” Moore said. “We’re not after a handout.”
“We are in unprecedented times,” Lancaster said. In part because of the credit crunch, he said, “U.S. car sales are at the lowest levels they’ve been since the 1940s.”
Low-interest loans, they said, would help the industry weather the credit crunch and the economic downturn. So local union members and company officials alike have been contacting political leaders.
Moore and Lancaster said whatever happens is likely to have a big impact at 105 GM Drive — and on the local economy.
“We want all the jobs here in Bedford we can have,“ Moore said. “As a county, I don’t think we can afford to lose any jobs anymore.”
On the plant floor
Those national and international issues boil down to machines, people and dollars in auto factory towns across the country.
Towns like Bedford.
“We’re probably 30 percent of what we were, within the UAW,” Moore said of local active employment.
Fifteen years ago, he said, more than 1,000 people worked at the Bedford plant.
The number is about 500 today, he estimated — about 400 UAW workers, 40 electricians and 80 salaried employees.
Still, those workers represent a sizable part of the local economy. Moore said the plant’s annual payroll is about $43 million.
But the number ripples beyond the plant.
A direct example, Moore said, is that some 1,500 GM retirees live in Bedford and surrounding communities.
Still hiring
In the past few years, Lancaster said, about 300 production employees and 30 salaried employees have joined the list of retirees from the Bedford plant.
But the facility also has hired about 50 full-time production workers, brought in about 40 production workers from other GM plants and added about 15 salaries employees.
That has added people “at good wages” to the local community, he said.
“We’ve done that even during times of reduced volumes,” Lancaster said.
A growth in the auto industry would translate into growth in the plant’s payroll, he said.
Spending and cutting
So far, GM is continuing plans to invest some $48 million investment in the Bedford foundry. That includes new machines to make housings for six-speed transmissions — a key part of GM’s next generation of vehicles.
“They are installing the first die cast machine right now,” Moore said. “We’ve done a lot of renovation within the facility” to prepare for the new machines, he added. “That’s what GM needs. These are state-of-the-art die <link http: www.foundry-planet.com _top external-link-new-window>casting machines coming in. They’re scrutinizing every investment they make. As we speak right now, everything’s a go at this point. … If you stop spending, that hurts your future.”
In its talking points to politicians, GM points to such investments. The company also points to key products, like the critically praised Chevrolet Malibu and the 17 GM models that get 30 miles to the gallon or better. And the automaker cites new technologies, like hybrid vehicles and the all-electric Chevy Volt (due in 2010).
Lancaster added the local plant has made, and continues to make, cuts in overhead costs to make it more competitive. Those cuts have cooperation among union, management and local suppliers.
“We’re survivors,” he said.
Union dues
Critics of the U.S. auto industry often point to UAW wages and retirement benefits — costs they say make the Big Three companies’ cars more expensive to produce.
Lancaster and Moore acknowledge the criticism. They say it’s simply out of date.
“The UAW has taken strides to make itself more competitive,” Lancaster said.
And he praised the working relationship between union and management in Bedford.
Moore pointed to a 2007 union-management agreement. Among other provisions, that pact called for a two-tier wage structure that lowered salaries for newer workers.
“You hear a lot of rhetoric about the UAW not being willing to make changes,” Moore said, “and I don’t think that’s true.”
U.S. automakers say the new agreements will cut costs by about $13 billion from 2006-2010.
Bad timing
For Moore and Lancaster, just a few months ago the troubled domestic auto industry was moving in a hopeful direction — developing hybrid and electric technologies, lowering costs and investing in a new generation of equipment and facilities.
Then gasoline soared to $4 a gallon, the credit crunch hit and the housing market collapsed.
Credit and confidence, Lancaster said, have been the biggest problems. He said 90 percent of buyers need a loan (or lease) to get a new car. Today, because of the lack of credit, he said “only 10 or 20 percent are eligible for a loan.”
“The other place you get hit is the confidence in the economy is the lowest it’s been in decades,” he said. “Those are the things that are having a direct effect in this market.”
Moore, who has been local union president only a few months, said the economy is far different now than when he took office. And much of that change, he said, is based on consumers’ fear about the economic slowdown.
“This auto industry has gone through some unprecedented times,” he said.
