By Charles Sercombe
Hamtramck city officials are preparing for a huge financial blow to the city’s budget.
On Monday, General Motors unexpectedly announced it was closing or ceasing work at five assembly plants – including the Detroit-Hamtramck Assembly plant.
City Manager Kathy Angerer said the city could lose anywhere from $800,000 to $1 million a year from the plant.
“The GM plant closure is devastating financially to the city,” Angerer said. “This doesn’t include the impact on local business or families in our community.”
In all, about 5,000 blue-collar jobs will be lost at all five plants. The other plants are Warren Transmission in Warren, Lordstown in Ohio, Baltimore Operations in Maryland and Oshawa in Ontario.
The Hamtramck plant has 1,500 employees.
GM is also eliminating 6,000 to 8,000 white collar jobs, according to media reports.
GM is not alone in scaling back its workforce. Ford is also laying off 20,000 workers.
The Hamtramck plant produces the Impala, Chevrolet Volt, the Cadillac CT6 and the Buick LaCrosse.
GM is making the move because car sales are down in the US and consumers now prefer SUVs and pickups.
Production at the Hamtramck plant will partly stop production first in March in 2019 and then finally in June.
GM is shading its wording on what will be happening, saying the plants are not being closed. Instead, the company is saying that production will cease at these plants and their future will be determined by upcoming contract negotiations with UAW members.
According to Review sources, GM is determined to close the Detroit-Hamtramck plant.
In retaliation to the plant closings President Donald Trump is threatening to take away tax incentives for electric vehicles and impose a 25 percent tariff on cars that GM imports from plants overseas and in Mexico.
The Hamtramck plant, commonly referred to as the Poletown Plant, was built in the 1980s.
The creation of the plant caused controversy because it required demolishing 1,600 homes – in an area of over 400 acres — in a Detroit neighborhood known as Poletown. Residents fought against being evicted but lost their case in a Michigan Supreme Court decision in 1981.
The court ruled the City of Detroit had the right to evict them through a legal process called eminent domain. Most of the plant is located in Detroit with a small portion on the Hamtramck side of the border.
In exchange for collecting property taxes from the plant, Detroit and Hamtramck were promised a yearly revenue in a special fund that was set up. At one time Hamtramck received $1.2 million a year when production was running high.
Mayor Karen Majewski said she plans to work with state officials and the governor to make sure “Hamtramck is at the table” during talks with GM.
“It’s all hands on deck,” she said.
If the plant does close, Majewski said it will require “creative” thinking on how to keep the property productive.
“It’s life-changing and culture-changing,” Majewski added.
The plant never lived up to the expected production level as first promised.
The annual income from the plant has played a large part in Hamtramck’s budget. Despite that infusion of money, the city has struggled financially in recent years.
The city’s finances were so bad that the state had to intervene twice and appoint an emergency financial manager. The last emergency manager left four years ago.
Since then the city has managed to build up a $5 million budget surplus – but much of that windfall came from one-time only revenues. The city’s annual budget is about $16 million.
Nov. 30, 2018