Friday, July 31, 2009

When Auto Plants Close, Only White Elephants Remain

http://www.nytimes.com/2009/07/31/business/31factories.html?th&emc=th

WIXOM, Mich. — The sheer size of the sites has inspired grand visions for redevelopment — a $1 billion football stadium, a huge Hollywood movie studio, even the world's largest indoor tennis complex.

But for the communities saddled with a huge, empty auto plant, the reality is dismal.

Abandoned car factories, sprawling over hundreds of acres, often stand vacant for years awaiting demolition, environmental cleanup and a willing developer.

Since 2004, General Motors, Ford and Chrysler have closed 22 major auto plants in the United States. Only eight of those have found buyers. And in the wake of the G.M. and Chrysler bankruptcies, another 16 plants will be shut by 2011.

The most optimistic redevelopment proposals, like a football stadium for the Atlanta Falcons or a movie studio in the small Michigan town of Wixom, a Detroit suburb, are long shots at best.

"The plants, whether they're still standing or reoccupied, are always going to be a haunting reminder of what we were, what we've gone through, and where we still need to go," said Representative Thaddeus McCotter, Republican of Michigan, whose district includes an old Ford plant in Wixom and a G.M. plant that will soon close.

Even sites in attractive locations are hard to sell in the weak economy. With so many companies being squeezed financially, there is a glut of available commercial real estate.

"Even if you only go back three or four years, it was easier than today," said Phil Horlock, head of Ford's land development division.

The loss to the local community when a plant closes goes well beyond jobs. Tax revenue evaporates and related businesses vanish.

Industry analysts estimate that each job in a plant helps create another five to seven jobs.

"Some of those are direct suppliers, but then there are places that workers spend money, like grocery stores, restaurants and day care," said Kristin Dziczek of the Center for Automotive Research in Ann Arbor, Mich.

Ford's 4.7-million-square-foot Wixom factory, which closed in 2007, was the company's largest assembly plant in the United States. More than six million cars were built there over 50 years.

At its peak in the late 1980s, the factory employed nearly 4,000. Now it's an empty shell of rusting corrugated metal, surrounded by desolate parking lots and a barbed-wire fence.

The plant fronts an Interstate highway, and stretches almost a mile along Wixom Road. It once provided 40 percent of the town's property taxes, but now accounts for less than 15 percent.

The town has about 13,000 residents, and relied heavily on the paychecks of plant workers.

"When it closed, a lot of businesses around us closed too," said Moe Leon, owner of the Bullseye Sports Bar and Grill on Wixom Road. "We're fighting night and day to stay above water."


rest at http://www.nytimes.com/2009/07/31/business/31factories.html?th&emc=th

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