General Motors will likely rebuild a plant in Oklahoma City badly damaged by a tornado last week, stalling production indefinitely, a spokesman told Associated Press (AP).
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“I don’t think it’s an issue that the plant is going to close,” GM spokesman Brian Akre reportedly said. “The damage is extensive, but we don’t know the full extent of it at this point. We’re fully insured for things like this. That mitigates the financial impact on the company.”
AP said the car park at the four-million-square-foot plant was nearly empty Friday as most of the 2,800 workers were told to stay home until further notice. They will get most of their pay and retain their health insurance while they’re out of work under GM’s contract with the United Auto Workers union, Akre told AP.
Associated Press said that skilled and sanitation workers were helping executives assess the damage Thursday’s tornado did to the plant, which produces the GMC Envoy XL, the Chevrolet Trailblazer EXT and the Isuzu Ascender.
The plant produces about 3,000 vehicles a week, just less than 3% percent of GM’s North American production of about 112,295 vehicles the week ended 3 May, Akre told AP.
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By GlobalData“In terms of our total production, it’s not huge,” Akre told AP. “But the issue for us is the production of that particular model.” GM has sufficient inventories of the sport utility vehicles to meet demand for “at least a few weeks,” Akre added.
AP said that GM could build more of the three SUVs at its Moraine, Ohio, plant, which currently produces smaller models of the same vehicles. Both plants are flexible.
“It depends on how fast the vehicles are selling,” Akre told AP. “Last month they were selling well because of some good incentives.”
The damage could also affect GM’s launch of its new GMC Envoy XUV, Akre told Associated Press. The retractable-roof Envoy is scheduled for production in Oklahoma City in late summer with sales starting in autumn, he added.
AP said the tornado injured at least 100 people and destroyed about 400 homes and 50 businesses when it hit the Oklahoma City area during rush hour.
Large chunks of wall and roof were stripped off GM’s plant, where steel support girders were all that remained of the factory’s west end. Pieces of insulation, timber and bent steel littered the area, AP said.
The news agency said about 1,000 workers were inside the plant when the tornado hit. No one was injured except two truck drivers working for GM buyers who received minor injuries.
The GM plant in America’s ‘tornado alley’ was seemingly well-prepared for the twister. A spokesman told Reuters that the plant had carried out a full tornado drill three weeks earlier and had tested the alert system on Thursday morning. The twister struck about 5.15pm local time that day after all employees had taken shelter.
Plant personnel director Robert Jones told Associated Press that the plant’s paint shop, body shop, powerhouse and cooling towers were heavily damaged. Electricity was knocked out, and remained off-line Friday, Akre told AP.
AP noted that the paint shop was added and the body shop and general assembly area were upgraded a year ago in a $US750 million project that converted the plant to SUV production from the discontinued Chevrolet Malibu.
“GM loves Oklahoma,” state governor Brad Henry told Associated Press. “This is their most productive plant. All indications are they are certainly going to rebuild.”
Akre told AP that workers will get about 95% of their salary through contract provisions requiring GM to pool money with state unemployment benefits. The exact percentage depends on the state’s benefits, he reportedly said.
Ironically, just hours before the twister knocked out its plant, GM had announced a $US100,000 donation to relief efforts after tornadoes hit other parts of the midwest earlier in the week. The company doubled the donation to $200,000 on Friday, GM said in a statement.
