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Published: Tuesday, 3/31/2009

Auto plan stirs local worries

BY LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER

Amid daily revelations about the continued viability of his employer, Clayton Akers has adopted an exasperated, if Zen-like, attitude to his job making Jeep Libertys and Dodge Nitros at the Toledo Jeep Assembly complex.

"We at Jeep are just hoping and praying that we can get any vehicle that can sell," said Mr. Clayton, who has made Jeep SUVs in Toledo for nearly 25 years.

Across the region Monday, workers, auto dealers, and elected officials responded to President Obama's announcement that the government was rejecting the viability plans submitted last month by both General Motors Corp. and Chrysler LLC.

The administration gave GM a 60-day window to submit a new plan to guarantee the largest domestic automaker's long-term survival and Chrysler just 30 days to finish an alliance with Italian automaker Fiat SpA and submit a new plan.

Tens of thousands of local jobs rely on the men and women who make:

•Jeep Libertys and Wranglers and Dodge Nitro SUVs at Toledo Jeep.

•Six-speed rear-wheel-drive transmissions at GM's Toledo Powertrain Plant.

•Engine and transmission parts at the Defiance Powertrain Foundry.

•Steering columns and torque converters at Chrysler's Toledo Machining Plant in Perrysburg Township.

•Engines at the Global Engine Manufacturing Alliance in Dundee.

The United Auto Workers estimates that as many as 60,000 active and retired UAW members live in northwest Ohio and in southeast Michigan's Monroe, Lenawee, and Hillsdale counties.

The union has largely concluded discussions on further concessions with both GM and Chrysler, but has not presented new terms to its membership for ratification or implemented the cuts until other stakeholders - such as GM's bondholders and the unaffiliated Canadian Auto Workers - work out their share of keeping the automakers afloat.

Speaking on background to reporters from the Midwest yesterday, two senior Obama officials said the administration's Auto Task Force will be working closely with both GM and Chrysler to make sure their revised plans pass muster.

They said the very real threat of an orderly and quick bankruptcy for one or both of the domestic automakers would help sharpen the minds of those who must sacrifice to ensure survival of the two domestic car makers.

Still, rank-and-file auto workers continue to voice concern that their industry is receiving disparate treatment.

"I don't understand the difference," said another longtime Jeep worker who would not give his name, "when it was the banks that caused so much of the problem, and the government continues to just hand them money."

The surprise announcement Sunday that GM Chief Executive Rick Wagoner resigned at the administration's request left some here wondering what impact the move might have locally.

"We're just trying to get our hands around everything today," said Ray Wood, president of UAW Local 14, which represents approximately 1,300 workers at the GM Powertrain Plant on Alexis Road, about half of whom are indefinitely laid off right now.

"I was encouraged that [President Obama] did address the autoworkers, the middle class."

Ohio Gov. Ted Strickland, speaking in Toledo, said he talked with the President Sunday night about the decision to ask Mr. Wagoner to step down.

"I also think it's appropriate for the administration to have a role in determining who's going to be the leader of these companies if they're expecting billions and billions and billions of taxpayer dollars to be made available to them," the governor said.

"My feeling, based on what I have been told, is that GM is much more viable in terms of having a sustainable future than is Chrysler at this time, and I think there is strong interest in trying to help Chrysler find a partner to merge with."

U.S. Rep. Marcy Kaptur (D., Toledo) said she considered unfortunate the Obama Administration's decision to identify bankruptcies as a potential auto-industry outcome, because of the effect that was likely to have on the stock market.

Miss Kaptur, who did not watch the President's news conference but was briefed on the administration's position during a conference call Sunday, said the response fails to address what she considers the problem's root: the foreclosure crisis and the resulting credit crunch, which have made it very difficult for consumers to buy autos and other durable goods.

"The fact that they've given the industry a couple more months, that's a good thing," but now the financial side needs to be addressed, she said.

Miss Kaptur said she could not support demands for further concessions from auto industry labor until she has some confidence that the capital side, such as GM bondholders, is sharing the sacrifice.

John Yark, co-owner of the Yark Automotive Group, which includes both Chrysler and GM dealerships, had a mixed reaction to the administration's pronouncements.

"I guess it's always kind of a shock when these things come out, but it sounds like once the government is comfortable with the plan, they're going to support it," Mr. Yark said.

"We're ready to play with whatever hand that the government deals us."

Ralph Mahalak, Jr., owns three Chrysler-Dodge-Jeep dealerships, including the Monroe Dodge Superstore in Monroe.

He predicted Chrysler's alliance with Fiat would ultimately help Toledo-area Chrysler workers.

"We're going to sell more Toledo-built Jeeps in Europe with this Fiat deal, and they're going to help us reach [newly increased mileage standards] at a much lesser cost than we can do it," he said.

Staff writer David Patch contributed to this report.

Contact Larry P. Vellequette at:

lvellequette@theblade.com

or 419-724-6091.



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