GM bankruptcy would threaten Anderson

ANDERSON - When Fritz Henderson was named General Motors Corp. president and CEO after Rick Wagoner was ousted from the position, Anderson resident Bob Ward had some suggestions for the new leader.

"They need to invest in America," Ward said in a letter to Henderson. "If they're going to take American dollars, it would be a nice thing if they would invest in America."

Ward, who retired from GM subsidiary Delco Remy in 1991, hopes the troubled company, on the brink of possible bankruptcy, will put more of its money back into Anderson, the city it left 25 years ago.

"That's something that they really could do and would be helpful to them because electronics and electricity is going to be more important (with new energy efficient vehicles)," Ward said. "That's Anderson, Indiana's, expertise."

Ward mentions companies in Anderson - like Taditel, on Eighth and John streets - that once were suppliers to GM and its affiliated companies. Now the companies are left with a large manufacturing capacity and no customers, forced to retool their business.

Many companies went under or took great hits when GM left town, but those that survived still stand to lose more if the auto giant goes bankrupt.

An Associated Press story on Friday indicated that, even if the auto giant files for Chapter 11 bankruptcy, it might not be easy to get the sweeping changes the company wants.

Pensions uncertain

In Madison County, where 25,000 GM employees once worked, the buying power of the company's retirees is great. Many made high wages as members of the United Auto Workers and have enjoyed comfortable retirements with their pensions.

GM's bankruptcy, however, could put many of those retirees in a tight spot.

"We've got a situation that's almost like a divorce, except for the fact that we've still got a huge payroll coming in here from retirees," Ward said. "For the sake of everybody, I hope they don't (file for bankruptcy), and I don't know whether they will or not."

GM has not said how its bankruptcy would affect retirees' pensions, but Ward guesses it could involve a federal program that insures pensions, which likely would leave retirees with about half their monthly GM income.

"Whether that would happen to us, I don't know," he said. "It might be a scenario something like that."

Ward, who started at Delco Remy as a mail boy and retired as an engineer, said he has been frugal with his pension and losing part of it would not hurt his lifestyle much.

Others probably won't be so lucky.

"People are worried to death that they're going to lose their pensions," said Danny Inglis, another Delco Remy retiree. "A lot of people are not going to make it. It's going to be a big hardship.

"You're promised you're going to have this and that and you go ahead and retire. We're just making ends meet the way it is, and it's scarier year to year when prices rise."

For Inglis, who has two years before he qualifies for Social Security, GM's bankruptcy could mean disaster.

"A lot of people struggle to make it on their pensions," he said. "I hope (a bankruptcy) is still not going to affect pensions."

Business in trouble

Without pension dollars flowing to local retirees, businesses in Madison County that depend on that money could be in trouble.

"GM filing for complete bankruptcy would have a disastrous effect on elements of Anderson," said city Economic Development Director Linda Dawson. "Any time you affect the income coming into your community through wages or retirement benefits, you affect the town and spending power. Obviously businesses are affected because they won't be able to utilize those spending dollars that they're used to depending upon. It ends up having a snowball effect."

Ward compared the loss of pensions to a tornado ripping through Anderson.

"I think it would be almost a disaster," he said. "It wouldn't be like it would shut the city down, but it would be something that would hit really, really hard. It would be of that magnitude as far as hurting the people."

Inglis, of Alexandria, said GM's bankruptcy would have far-reaching effects into the county.

"I think it's the GM pension that's keeping the Anderson and Madison County economy going," he said. "It might be almost a ghost-town thing; it's scary to even think about it."

Dawson said companies that still serve as indirect supplier to GM would be affected even more.

"Everything's going to be affected if GM goes under," she said.

City's liability

A GM bankruptcy also would create a hurdle for the city, to which the company donated several properties when it left. The former plants 20 and 16 are still up for sale by the city, and the former Guide complex, a GM spinoff, was just demolished and awaits an environmental assessment.

"There would be concerns of the liability of continuing the environmental mediation of certain areas of property in Anderson," Dawson said. "GM properties have four or five hot spots that it has retained and is continuing to do mediation."

Properties already within city control would not be directly affected by a GM bankruptcy, but the possibility thwarts the hope that a healthy GM could eventually be more active in helping to develop those properties, Dawson said.

The city isn't taking the company's precarious situation lying down, however. Officials have been taking part in a national initiative of communities affected by the automobile industry called the Mayors and Municipalities Automotive Coalition.

"(The group was) established to give the opportunity for mayors and automobile-related communities a voice at the national level," Dawson said. "This organization has been far-reaching, and through that we're trying to help shape the legislation so the automobile community will have some input and opportunity for survival through this downsizing."

Though Dawson expects the city's entire economy to be affected by a GM bankruptcy, she has hope that Anderson will eventually emerge independent of the company.

"Our initiative in Anderson of leaning toward more energy-conscious hybrid vehicle production is an answer to help reboot the economy," she said.