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GM workers fearful of future GM workers fearful of future
(1 day later)
Richard Lister BBC News, DetroitRichard Lister BBC News, Detroit
Pontiac is just one of many GM brands to suffer in the economic downturnPontiac is just one of many GM brands to suffer in the economic downturn
In Coco's Coney Island Restaurant in Pontiac, just outside Detroit, plates are laden with beef gyros and grilled chicken sandwiches, but all eyes are on the image of Barack Obama on the big flat screen TV.In Coco's Coney Island Restaurant in Pontiac, just outside Detroit, plates are laden with beef gyros and grilled chicken sandwiches, but all eyes are on the image of Barack Obama on the big flat screen TV.
Coco's, with its big fifties style sign outside, is a popular hangout for workers at GM's Pontiac plant across the road. They come for breakfast lunch and dinner, and today the President is talking about their future. Coco's, with its big 1950s style sign outside, is a popular hangout for workers at General Motors' (GM) Pontiac plant across the road. They come for breakfast lunch and dinner, and now the President is talking about their future.
Men in blue overalls with name patches sewn in have stopped chewing to listen, as he tells GM and Chrysler that they need to go away and come back with plans for deeper restructuring.Men in blue overalls with name patches sewn in have stopped chewing to listen, as he tells GM and Chrysler that they need to go away and come back with plans for deeper restructuring.
Everyone in the room knows what that means. One way or another, more job cuts are on the way. This in a state where one in ten of the workforce is out of work, and in a country where four hundred thousand people in auto-related industries have lost their jobs in the past year. Everyone in the room knows what that means. One way or another, more job cuts are on the way. This in a state where one in 10 of the workforce is out of work, and in a country where 400,000 people in auto-related industries have lost their jobs in the past year.
Jeremy Medlock is one of those in the blue overalls, pondering his future. "I have colleagues who have thirty years or more [with GM]....who've been laid off indefinitely" he says. "Those jobs ain't coming back". Jeremy Medlock is one of those in the blue overalls, pondering his future. "I have colleagues who have 30 years or more [with GM].... who've been laid off indefinitely" he says. "Those jobs ain't coming back".
'Scapegoat''Scapegoat'
He is nervous about what happens now. Like many I spoke to in Michigan, he is also indignant that President Obama had demanded the resignation of GM's former CEO Rick Wagoner. He is nervous about what happens now. Like many in Michigan, he is also indignant that President Obama had demanded the resignation of GM's former chief executive Rick Wagoner.
"They used him as a scapegoat. He's done everything that he could possibly do and I don't see anyone being able to do any more or do any better," he says. "They used him as a scapegoat," he says. "He's done everything that he could possibly do and I don't see anyone being able to do any more or do any better."
An industry analyst I spoke to later, Edward Lapham, the executive editor of the Automotive News, agrees: "The fact that the White House can fire CEOs is not a good thing." Industry observer Edward Lapham, executive editor of Automotive News, agrees.
"The fact that the White House can fire [chief executives] is not a good thing," he says.
Many see ex-boss of GM Rick Wagoner as a scapegoatMany see ex-boss of GM Rick Wagoner as a scapegoat
But the reality is that federal loans are now the only things keeping these companies solvent, and that gives the administration leverage.But the reality is that federal loans are now the only things keeping these companies solvent, and that gives the administration leverage.
Mr Lapham believes the industry as a whole is relieved at what Mr Obama had to say; that the medicine he offered "could have been a whole lot worse".Mr Lapham believes the industry as a whole is relieved at what Mr Obama had to say; that the medicine he offered "could have been a whole lot worse".
As it is, he has given GM another two months breathing space and held out the prospect for further investment in Chrysler if it completes a deal with Fiat that is already well advanced.As it is, he has given GM another two months breathing space and held out the prospect for further investment in Chrysler if it completes a deal with Fiat that is already well advanced.
Difficult futureDifficult future
GM has a bigger problem in trying to renegotiate contracts and debt management deals that have proved intractable for months.GM has a bigger problem in trying to renegotiate contracts and debt management deals that have proved intractable for months.
With his forceful speech, and executive shakeups, President Obama was signalling his administrations's seriousness in forcing GM to downsize, and brace itself for a difficult future - without a government-issue financial crutch to lean on. With his forceful speech, and executive shakeups, President Obama was signalling his administration's seriousness in forcing GM to downsize, and brace itself for a difficult future - without a government-issue financial crutch to lean on.
But Mr Lapham and other analysts also believe the administration sees GM as "too big to fail", and will ultimately find a way to keep it going, one way or another.But Mr Lapham and other analysts also believe the administration sees GM as "too big to fail", and will ultimately find a way to keep it going, one way or another.
It undoubtedly faces lean times though, and they will be experienced not just by those like Mr Medlock working in GM factories - they will hit everyone in the supply chain, from parts suppliers and tool manufacturers to dealers and service centres. And, of course, all the people who rely on them for business too.It undoubtedly faces lean times though, and they will be experienced not just by those like Mr Medlock working in GM factories - they will hit everyone in the supply chain, from parts suppliers and tool manufacturers to dealers and service centres. And, of course, all the people who rely on them for business too.
Back in Coco's, Theresa Ivanaj, who runs the place, looks across the lunch crowd and shakes her head. The booths are half empty. Even the 99 cent burgers can't pull people in.Back in Coco's, Theresa Ivanaj, who runs the place, looks across the lunch crowd and shakes her head. The booths are half empty. Even the 99 cent burgers can't pull people in.
"At this time of day the restaurant should be full" she says."At this time of day the restaurant should be full" she says.
"There were a lot of regulars who I used to see every day that I don't see any more"."There were a lot of regulars who I used to see every day that I don't see any more".
Some have been made redundant but "even those still in work are scared to come out and spend the money," she says, "because they don't know what the future might bring."Some have been made redundant but "even those still in work are scared to come out and spend the money," she says, "because they don't know what the future might bring."