GM chip strategy leaves Kansas plant in the cold

Fairfax Assembly has lost 157 days of production this year, according to AutoForecast Solutions.

Fairfax Assembly, a 34-year-old plant perched on the Kansas side of the Missouri River, has played a major role in keeping General Motors’ profits flowing in as the microchip shortage hobbles global auto production.

It’s just not the role that the more than 1,800 people who work there want.

The plant, which makes the Chevrolet Malibu sedan and Cadillac XT4 crossover, has built nothing since the first week of February as GM diverts chips to plants that make more profitable vehicles. In the nearly seven months that Fairfax has been dark, GM’s full-size SUV plant in Texas hasn’t canceled a single scheduled day of production, and four other North American plants have missed less than two weeks.

No automaker has kept an assembly plant offline this year more than Fairfax has been.

“A lot of depression and anxiety has set in. It’s a nonstop culture of ‘what’s next?’ ” said Anthony Walker, an employee assistance program work-family representative for UAW Local 31 at Fairfax. “I would definitely, definitely say it’s been more stressful during this layoff than it was in the past.”

Hourly workers at Fairfax were called in for training last week, the first time they’d been back since midwinter. The plant’s latest restart date — it’s been pushed back multiple times — is Sept. 20. But that’s only for some workers, and just for the XT4. GM has decided it can still do without more Malibus, furthering the uncertainty workers there feel about the plant’s future.

Some fear they’ll have to find new jobs or transfer away from the Kansas City area, amid speculation that Malibu and XT4 production could end in the next few years. Forecasters expect the vehicles to be discontinued by 2025, after the next labor contract is signed.

GM posted record pretax adjusted earnings of $4.1 billion in the second quarter, so its plan to protect profitability seems to be working, Local 31 President Clarence Brown said. “It’s just we’re not involved in the plan.”

GM spokesman Dan Flores said in a statement to Automotive News that GM recognizes the chip shortage has been difficult for many employees and is doing “everything possible to minimize the impact” to employees, dealers and customers. Flores said it’s too early to know how the plant closures will affect profit-sharing payments to workers next spring.

For some who transferred to Fairfax from other plants that GM previously closed, the extended downtime conjures up old memories.

Nick Livick, now a team leader for door line and trim, moved to Kansas City in 2009 as a high school senior when his mother transferred from Janesville Assembly in Wisconsin.

“There’s always worry from those kinds of people who have had to stay that last day and watch their home fade into the darkness because they’ve got to leave,” he said.

Still, he’s optimistic about Fairfax for now.

“My shop chairman has been very clear that he doesn’t think that Fairfax is going to close,” he said. “And I don’t see that in our future either because we have such a great quality-oriented, quality-focused work force.”

The chip crisis is unprecedented, but plenty of plants have survived after going through lengthy shutdowns for model-year changeovers or other updates, said Art Wheaton, a labor expert at Cornell University.

“The problem for the workers there is they’re building a car in a truck market,” Wheaton said.

Carlin Grecu, a mutilation coordinator at the plant, plans to retire within the next several months after 15 years at Fairfax and 22 years total with GM. She acknowledged the cyclical nature of the auto industry and recognizes that the plant’s current products don’t provide much long-term job security.

U.S. sales of the Malibu fell by a third in the first half of the year, and the XT4 was down 13 percent. In the second quarter, GM sold only about 7,400 of the two vehicles combined, vs. more than 62,000 Malibus in the same period five years earlier.

“The workers are very nervous about it because the Malibu has been here for a very long time,” she said. “But it looks like GM is leaning more toward your SUVs and your electric cars. The Malibu being just a car … it’s up in the air.”

Fairfax workers got a message from GM last week outlining the planned Sept. 20 restart. The level of detail included made it the most promising sign they’ve received since the plant went idle, Livick said, but it was still met with a level of uncertainty.

“When they send the text out, the last line is always ‘everything subject to change,’ ” Livick said.

Fairfax workers are enduring their third lengthy shutdown in less than two years, starting with the UAW’s 40-day strike against GM during contract negotiations in the fall of 2019. Last year, they were off for eight weeks at the beginning of the coronavirus pandemic.

“The last two years, I’ve seen a spike in stress and anxiety and suicidal thoughts — more than I’ve seen in this job since 2010,” said Walker, the employee assistance representative at the plant.

Opioid addictions and alcoholism have worsened during the layoff, Walker said. Many who were in recovery have reverted to bad habits because of idle time at home, without accountability and support from co-workers dealing with similar issues, he said.

Working at an assembly plant is a career as well as a lifestyle, said Livick, a third-generation UAW member working for GM. “When you take that away and you take away that sense of certainty and that sense of job security, that can do a lot to a person,” he said.

Workers recognize why GM has prioritized pickup and SUV plants, but that understanding doesn’t necessarily soften the blow.

“That’s 100 percent of why we’ve been off for so long,” Livick said. “All of us workers are more than ready to get a product.”

But before Fairfax workers can build anything, GM needs to secure enough chips to make it worth turning the lights back on.

Until then, they wait.

Read More: Auto News

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