General Motors Corp. will not keep its Shreveport, LA, assembly plant open after 2012, despite booking a deal earlier this month to sell the Hummer brand to a Chinese industrial group that seemed to save the facility.
The move also would shutter a stamping plant at the facility, part of a plan by the auto maker to reduce its total number of assembly, powertrain and stamping facilities in the U.S. from 47 in 2008 to 34 by the end of 2010, and 33 by 2012.
But the Shreveport closing also represents one of the first assets to be identified by GM as one of its less-attractive. As part of the auto maker’s bankruptcy strategy, known as a 363 sale, it will separate attractive and unattractive assets into two groups.
The best assets, such as the Cadillac, Chevrolet, Buick and GMC brands, will exit bankruptcy with the “new GM,” while most of the underperforming ones will remain in bankruptcy and face liquidation with the “old GM.”
GM makes the disclosure over Shreveport in a court filing yesterday. The plant builds the Hummer H3 SUV and pickup, as well as the Chevrolet Colorado and GMC Canyon small pickups. Two years ago, the assembly and stamping facilities employed close to 2,000 people and were updated several years ago for Hummer production.
When GM released the list of plants it would shutter the day it entered bankruptcy, Shreveport was surprisingly absent from the list given its recently unpopular product. But after China’s Sichuan Tengzhong Heavy Industrial Machinery Co. Ltd. stepped in to buy the facility with a long-term agreement calling for GM to provide contract assembly services and supply key components and materials, it appeared safe again.
GM returns to bankruptcy court June 30 to provide a complete list of the assets it plans to take with it when the auto maker emerges.
