How will auto bailout affect Texans?

December 19, 2008 8:24:15 PM PST
It would be easy to dismiss the auto bailout as a Detroit story, but there are 97,000 people employed in Texas making cars and trucks and another 160,000 people selling cars and auto parts. That adds up to over 250,000 Texans. [SIGN UP: Get headlines and breaking news sent to you]

So with money running out for GM, it wasn't exactly party time when KTRK went to the Arlington GM plant where workers average $28 dollars an hour and might face more cuts.

It takes 28 hours to turn sheet metal into an SUV at the Arlington assembly plant where workers are uneasy. It took just a minute to turn around the industry's short term fortune as President Bush announced a $13 billion dollar loan to US auto makers on Friday morning.

"There's millions of people who depend on all of us in the auto industry," said auto worker Jack Hargrove.

Auto workers are the first to remind you their industry reaches far beyond Detroit these days and deep into Texas. The Arlington plant is the only place in the world making the Tahoe, Suburban, Denali and Cadillac Escalade. Sales for the trucks are up slightly this month but demand is down nationwide.

The plant is shutting down for four weeks, twice as long as the normal holiday break for GM. Auto workers are paid 90% of their full paychecks during work stoppages. It's a combination of state unemployment and company money. It's designed to keep workers from going somewhere else so they can come back to the plant when conditions improve. But it will likely go away as GM restructures.

It's the first time since 2005 the company has done this and it is a serious sign of just how much demand has shrunk for the vehicles, some of GM's most profitable.

"Customers are asking about it and rightly so," said George Demontrond of Demontrond Auto Sales. "They want a company to be around to stand behind their products."

Demontrond lists a GMC dealership among the many he owns in the Houston area. His employees were also counting on federal action.

"It's not like giving money away to fat cats," said Demontrond. "It's a bridge loan at a time when it's desperately needed to save the industry.

The bailout loan may not save the industry, but it buys time for industry leaders and workers like Hargrove to make tough choices like shrinking pay and retirement benefits that could save them.

"If that's what has to happen we'll do it, whatever to keep the plant open," said Hargrove.

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