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Old G.M. plants rust as new company takes off

The General Motors bankruptcy gave birth to two different companies, and one of them is struggling in the shadow of the other.
Image: closed General Motors plant
Officials in Lansing Township are still waiting for either company — G.M. or Motors Liquidation — to cart off mounds of rubble from two plants demolished before bankruptcy.Bill Pugliano / Getty Images
/ Source: The New York Times

By day, hundreds of General Motors workers make pistons and other engine parts at a factory on this city’s east side. By night, gangs of thieves have repeatedly looted empty G.M. plants on the same property, and have twice fired shots at security guards.

The scene at Flint North, as the complex of mostly closed factories is known, is a vivid reminder that the automaker’s bankruptcy last year gave birth to two different G.M.’s — and that one of them is struggling in the shadow of the other.

When American taxpayers bailed out General Motors, the company was split, with the best assets going to the reorganized automaker of the same name. This new General Motors is selling cars, making money and preparing a public stock offering.

The least valuable assets, including the run-down factories in Flint, were left in the shell of the old G.M., now named the Motors Liquidation Company.

This company has filed a bankruptcy reorganization plan that lays out how it will clean up and sell off the dozens of unwanted pieces of what was once the world’s largest automaker.

'They just turned the lights off'
But the process is slow, and while plant closings have already cost jobs and tax revenue in many communities, the empty factories themselves are now becoming a burden.

"When General Motors closed shop in Flint, they just turned the lights off," said Chris Swanson, a captain with the Genesee County Sheriff’s Department, which has made nearly two dozen arrests this year at the Flint North complex on charges of theft, assault with intent to murder and others.

Law enforcement officials say thieves have stripped tons of copper from the plants in Flint over the last year, but only last month, after shots were fired at an unarmed security guard, did G.M. hire off-duty sheriff deputies to patrol the area. Two nights later, someone fired at one of the deputies as well.

Fifty miles west of Flint, officials in Lansing Township have a different problem. They are still waiting for either company — G.M. or Motors Liquidation — to cart off mounds of rubble from two big plants demolished before bankruptcy. The sites are an eyesore, and an obstacle to redevelopment efforts, officials said.

"It has left us somewhat devastated," said John Daher, the township’s supervisor.

Officials from Motors Liquidation would not comment for this article, beyond issuing a brief statement about their commitment to safety at the properties. "M.L.C. takes facility security very seriously," it said. "In collaboration with General Motors Co., M.L.C. has over the past year taken many steps to ensure the security of the facilities it owns, including in Flint."

'Nearly impossible' redevelopment
The Motors Liquidation assets constitute the infrastructure of what could be a small automaker: four assembly plants, five engine plants and several factories that stamp out parts. It also owns warehouses, offices, parking lots and other real estate. Many of the properties are contaminated with industrial waste.

The biggest challenge for Motors Liquidation, the company said in its recent bankruptcy filing, is to fix the environmental problems so old facilities can be put up for sale. "It is nearly impossible to redevelop such properties for productive, job-creating purposes unless environmental remediation is complete," said one executive, Ted Stenger.

The disposal of the properties is being financed by taxpayers in the form of a $1.17 billion loan made by the Treasury Department. Most of that money, $836 million, will go toward the cleanup of about 90 plants in 14 states. The bulk of that work should begin by early 2011.

None of the Treasury loan has been repaid, and payments are not likely to happen until the cleanup efforts are completed and more properties are sold, which could take years.

In the meantime, many areas face a long, barren period of minimal activity at idle factories.

Fate of idle plants
Two of the closed assembly plants have found buyers, and a third, in Shreveport, La., will continue to make cars for G.M. until its shutdown in 2012. But the fate of other factory sites is less clear, and may not be decided until the court accepts the bankruptcy reorganization plan, which could take several months.

Some of the facilities are still tangled in relationships with the new General Motors. Union workers at a closed stamping plant in Indiana, for example, have balked at a contract with a potential buyer because many of the workers might have rights to transfer to other G.M. factories, in jobs that would pay better.

In Moraine, Ohio, Representative Michael R. Turner is asking the Obama administration to discourage Motors Liquidation from selling that city’s closed G.M. plant to anyone who would tear it down and sell it for scrap. Ron Bloom, a former member of the administration’s automotive task force, responded that the Treasury Department had stressed "the importance of supporting redevelopment and job creation," according to a letter Mr. Turner released Tuesday.

So far, the situation at Flint North has been the messiest.

The complex is the last vestige of the enormous Buick City manufacturing center that in the 1980s was among the largest automotive production sites in the world. The six plants at Flint North had been phased out by G.M. in stages.

Ownership of Flint North was ceded to Motors Liquidation in July 2009, though in a special arrangement, G.M. kept making pistons and other engine parts at one of the factories. The empty plants were essentially abandoned in their as-is condition on their last day of production. "They still have personal goods on the table," said Captain Swanson of the sheriff’s department. "There’s still ceiling fans going."

Ring of thieves
Shortly afterward, thieves began to systematically strip copper — used in heating, cooling and other systems — from one of the nearby vacant plants. Authorities said that a ring of thieves hit the building night after night over a three-month period, taking out more than 150,000 pounds of copper.

The gang would load the metal on flatbed rail cars — owned and once used by G.M. — and roll the cars to a hole in a fence, where the copper was put on trucks and then sold to scrap dealers.

In March, the authorities arrested 11 people and estimated the value of the stolen copper at more than $1 million. "They were trying to steal every piece of copper that they could," said the Genesee County prosecutor, David S. Leyton.

But even after the arrests, no additional security was posted at Flint North until August, when thieves returned and the arrests resumed. Seven adults and four juveniles were arrested, including one person who had been convicted and sentenced to probation for participating in the earlier burglaries, the police said.

Since the latest intrusions, Motors Liquidation and G.M. said they had hired more armed guards to patrol the complex. The 400 workers at the only functioning plant, meanwhile, will either be transferred out of the plant or laid off by November.

This story, "," originally appeared in The New York Times.