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Keeping the line open; Cars: Delaware's rescue of its General Motors plant came with a price, but jobs were saved and the campaign is a primer for other states.

THE BALTIMORE SUN

WILMINGTON, Del. -- At General Motors Corp.'s assembly plant just outside this city, the new midsize Saturns have begun rolling out.

Although production is slow during the start-up phase -- about 30 units a day -- analysts say the new sedans and wagons represent GM's best hope of competing with the Toyota Camry and Honda Accord. Industry sources say the plant could eventually turn out as many as 200,000 vehicles a year.

For Delaware and the Boxwood Road plant's 2,600 workers, the cars have proved a salvation, saving the plant from a death sentence.

It was Dec. 3, 1992, when Thomas J. Davis, then vice president of GM's small-car division, climbed onto a platform in the plant's tire building and told nearly 2,000 first-shift workers that the 52-year-old plant would be closed.

There were no jeers, no heckling, just silence, recalled James Brown, a 50-year-old body shop worker. "Some of the women, some of the men cried. It was like getting hit with a big hammer," he said.

The rescue of the Wilmington plant has a particular resonance about 70 miles to the south, where 3,000 auto workers worry about the future of GM's 63-year-old Broening Highway van assembly plant.

Last summer, as rumors of the Baltimore plant's closing swirled, GM Chairman John F. Smith Jr. committed to keeping it open until the end of next year. Beyond that, its fate is uncertain, and a state task force has been created to try to persuade GM to keep the plant open.

No single factor rescued the Wilmington plant. Rather, it was the convergence of a number of things, among them an improved economy; the sales success of Saturn; a union work force that was among GM's most productive; and an aggressive governor who refused to accept the plant's demise.

And it came with a cost: more than 1,000 high-paying jobs.

It started on Nov. 30, 1992.

Thomas R. Carper was still savoring his lopsided victory to become Delaware's first Democratic governor in 20 years when his wife told him at breakfast that GM might close its Boxwood Road Chevrolet Corsica and Beretta assembly plant.

She had heard the rumors at E. I. du Pont de Nemours in Wilmington, where she served as a division manager. It was the weekend and there was little Carper could do.

Monday morning the governor-elect was on the phone to GM's headquarters in Detroit. He wanted to talk to John G. Smale, who had been chairman at GM only a few weeks, or to Smith, who had taken over as president earlier in the year.

He settled for an opportunity to meet with Davis, the head of GM's small-car division. That evening, along with Gov. Michael Castle, Carper flew to Detroit. The two men met with Davis early the next morning and asked about the plant's future. "For an hour and a half we asked the same question in a variety of ways and for an hour and a half he declined to answer them," Carper recalled in a recent interview.

"When we left, Mike and I looked at each other and I said, 'We're in trouble.' "

Loss of the GM plant would have been a staggering blow to this tiny state's economy.

With 3,500 workers, GM was the Delaware's 11th-largest employer, accounting for more than 1 percent of the state's total employment. Its payroll topped $142 million a year.

It was estimated that another 4,000 non-GM jobs would be lost also if the Delaware plant were closed.

Carper was determined not to let this happen.

The first step was to call a meeting of "corporate Delaware." At 7 a.m., the morning after the meeting with Davis, the chief executives of five of the biggest companies in the state gathered at the governor's conference room on the top floor of a state office building in downtown Wilmington.

Their agenda was to figure out ways to save the plant. But GM was already moving.

"The very next day, before we even had a chance to present anything we had worked up, GM announced that they were closing the plant," Carper said. "No ifs, ands or buts. This is it."

GM's decision came at a very difficult time for the nation's No. 1 automaker.

It was about to report a stunning $23.5 billion loss for 1992. Its North American automotive operations hadn't posted a profit since 1989, and its share of the U.S. market was shrinking rapidly.

GM had too much capacity and too many workers, 75,000 too many, according to some analysts.

"It was a period when we were always two weeks away from bankruptcy," said one GM official.

No alternate automaker

In Delaware, the outlook was not promising. Efforts by officials, including U.S. Sen. Joseph R. Biden Jr. and Bob Coy, the state economic development director, to interest Ford, Toyota, Mercedes-Benz, Volkswagen and Audi in taking over the Boxwood factory all came up short.

"Our strategy was twofold," said Darrell Minott, Delaware's current economic development director who was secretary of labor during the GM crisis. "If we couldn't get GM to change its mind, we hoped to find another user for the plant."

Despite the disappointments, Carper, by now governor, remained hopeful. "We won't take no for an answer," he once told Davis, the GM executive.

Carper was aware of GM's financial plight. But he also anticipated that a rising economy would boost auto sales, and he wanted Wilmington to be ready to take advantage of any opportunities that might present.

He had his staff begin work on a multimillion-dollar incentive package that included training funds and money to make improvements to the port of Wilmington if needed.

Only a miracle could save the plant, concluded Irving S. Shapiro, former du Pont chairman, after completing a task force study requested by Carper.

Still, Carper was determined. He made another trip to Detroit on Aug. 18, 1994, where he had dinner with Davis and met the next morning with Stephen P. Yokich, now president of the United Auto Workers and then-vice president of the UAW's GM division.

Yokich was to meet with Smith, GM's president, later that day. He invited the governor to tag along.

"Steve went into the meeting and I waited outside," Carper recalled. "I waited, and waited and waited."

When he finally got to meet the GM president, Carper drove home the same point he made to Davis the night before and to anyone else at GM who would listen: "Why are you closing a plant with your most productive work force?"

In its annual survey of the U.S. auto industry's productivity, Harbour and Associates Inc., an independent, Troy, Mich.-based, automotive research company, found that Wilmington was GM's best auto plant. It was nearly 23 percent more efficient than the average GM plant.

UAW joins rescue effort

Delaware officials weren't acting alone in their effort to retain the plant. The UAW was also involved. The union was taking a different approach. Yokich asked Smith if there there were any innovative ways to arrange a union-company partnership to save the Wilmington plant.

Smith was receptive to the suggestion. "Jack didn't want to have to shut down a plant with an excellent work force, that built a quality product and had good union-management relations," said a GM spokesman.

The company rated the union-management relationship of its assembly plants on a scale of 1 to 10, 10 being the best. "You get a bunch of threes," said a GM official, "and then a 9 at Wilmington pops up. That said, 'Hey, the union and management go to lunch once in a while.' " Working behind the scenes, Yokich and Davis, reached an agreement in the spring of 1994 to work together on trying to find a way to keep Wilmington open. They called their effort "Project Innovate."

Car sales were on the upturn in 1994 and GM was rethinking its early decision on how many vehicle assembly plants it needed. It was also giving thought to supplementing its compact Saturn line with a midsize car.

All three developments bode well for Wilmington. There was a ray of hope.

Davis called Carper to tell him about an agreement with the UAW to discuss development of the new car, but warned the governor not to get his hopes up. The car might never be produced, or it could be made in another part of the world.

"I remember that call to this day," Carper said recently. "I think it was the turning point. Despite Tom's admonition not to get my hopes up, I recall being very encouraged. It was the first real encouragement after months of being told there was no other outcome: The plant would close. The decision was final."

Overflow gives reprieve

Wilmington got a big break in November 1994. That's when GM picked the Boxwood plant for overflow production of its new Malibu sedans. Instead of closing at the end of 1996 with the phase-out of its Chevrolet Corsica and Beretta lines, Boxwood's life was extended by two years.

"It was like getting a reprieve from a death sentence," said Joseph E. Brennan III, a 30-year plant veteran and president of UAW Local 435, which represents the hourly workers.

Carper saw more in the GM announcement. He envisioned the Malibu "as a bridge" that would keep the plant active and its work force together until GM made a decision on where it would build the new Saturn.

With its eye on winning the Saturn, union workers voted in early May 1995 to approve a new, more flexible contract based on a similar pact at the innovative GM Saturn plant in Spring Hill, Tenn.

Under the new pact, employees would break with the traditional assembly-line format. They would perform a variety of jobs and work as members of a team.

Under this arrangement the plant would need fewer workers, but it had already trimmed about 1,000 jobs as production slowed on Corsica and Beretta models.

"The team concept reduced the inefficiencies in the old contract," said Harvey Thomas, manager of the Wilmington assembly plant. "It allows you to have workers do things that are logical for them to do. For example, instead of having one person do something to a piece, a second person do something else, and a third person perform a third task, now one person does it all."

Despite their ratification of the contract, GM made no promises.

But the vote gave Carper more ammunition to use a few weeks later.

Responding to the governor's invitation, GM held its 1995 annual stockholders meeting in Delaware. The day before the meeting, Carper had dinner with GM management and its board in the Green Room of the Hotel du Pont.

"It was not a place to make a hard sell," he said, "but my goal was to make sure that when they left, they had a good feeling about Delaware as a place to do business."

While GM was still noncommittal, industry trade publications were reporting that Saturn was looking at five possible sites for its new midsize car, including Wilmington and Spring Hill, where the original Saturns are built.

Model of efficiency

That was all the motivation Carper needed. He told Coy to prepare a report comparing the costs of building the Saturn in Wilmington vs. other sites.

"I don't remember the numbers," Coy said, "but it made Wilmington look good. It showed that Wilmington was cost competitive. How accurate was it, only GM would know."

With the information in a three-ring notebook binder, Carper and Coy traveled to Spring Hill to present their report to Saturn's president, Richard LeFauve.

The session turned awkward and even a little embarrassing.

"He [Carper] came down here saying he wanted to look at our training program," said James Farmer, former spokesman for Saturn. "He brought his economic development director with him. We showed them all the respect due a governor, but then we learned that he was trying to sell Skip on the Wilmington plant.

"I intercepted the book," Farmer said.

Carper defended the visit. "We were there primarily to see their training program," he said with a laugh, "but we had that intention and others.

"It may have been awkward," he conceded, "but I don't think it killed anybody. I was looking out for my state."

Despite the clumsy session, the outlook for Delaware took a positive turn in the spring of 1996, when Thomas, who had been business team leader for Saturn, was named plant manager.

The appointment seemed to rally the workers. "Our quality got even better," Thomas said. "The plant seemed to be on a mission. The workers had a slogan: 'If we are not be able to change GM's mind, we will make it look like one of the worse decisions the company ever made.' "

GM was happy with its Spring Hill plant and the 7,100 workers there, but it couldn't make a a good business case for expansion.

As one company official put it: "The infrastructure in Spring Hill couldn't handle 10,000 people. It didn't have the schools, the churches, the hospitals and the cemeteries needed to handle that many people."

The suspense finally ended in August 1996, when GM announced that it would build the new Saturn in Wilmington. "It took a great burden off our backs," said Brown, the body shop worker.

Carper called it the "happiest day of my administration."

It was a big win for Delaware, but it didn't come easy.

"In retrospect, you tend to forget the anguish," said Coy. "You remember the positives. But the situation is on your mind all of the time. There was no escape. It becomes an obsession. You can't sleep. You wake up in the middle of the night thinking about it."

In the end, the only incentive provided by the state was $1 million to retrain the plant's workers.

Carper takes little credit for the state's success. "The heroes and heroines of this story, in my judgment, are the people who work at the GM plant who did not give up," he said. "They maintained the plant's high productivity when it didn't look like they had a future.

"My job was to tell the Wilmington story to whoever would listen. They gave me a great story to tell."

It was a bittersweet victory, Brennan said of the battle to save Wilmington. "We lost nearly a 1,000 jobs since GM first announced it was shutting down the plant, and they are looking at cutting another 300 jobs," he said.

"But don't take me wrong," he added. "Sure, we're happy they decided to keep this plant open, but we paid a big price. If they keep Baltimore open, you can bet the workers there will pay a big price, too."

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