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Economic development officials stunned by GM plant no-vote

August 16, 2010

Indiana Commerce Secretary Mitch Roob said he was completely surprised by local General Motors workers' refusal to vote on a proposed contract by JD Norman Industries, a decision that appears to set up the plant for certain closure in September 2011.

GM is trying to sell the plant to JD Norman, based in Addison, Ill., but hasn't received much cooperation from United Auto Workers Local 23, which represents 631 workers at the plant. Union members voted 384-22 on May 26 not to open contract negotiations with Norman, which would pay a lower hourly wage, and—workers believed at the time—wipe out their GM retirement eligibility.

Despite the initial vote, higher-level UAW officials continued to work with JD Norman and GM to come up with a proposal the rank-and-file might accept. Norman is expected to become a GM supplier.

"I’m extremely disappointed that the employees were not given an opportunity to vote," Roob said Monday morning. "The real losers," he said, are the "thousands who will never have the opportunity to work at this facility."

Members of Local 23 shouted down the union's international representatives at a Sunday afternoon meeting to learn about the proposal. The meeting ended abruptly, and plans to hold a vote Monday were canceled.

General Motors Corp. had been planning to close the plant next year unless it is sold. JD Norman emerged as a potential buyer this spring, but the company said it needed wage and benefit cuts to make the deal work. Under the proposal, base pay would drop from $29 per hour to $15.50.

It's unclear whether JD Norman will now walk away from the deal. Michael Young, project director at economic development organization Develop Indy, said he's still awaiting word from JD Norman about its next step. Young said, he was “very surprised and disappointed” at the workers' decision.

Sunday's proposal was the result of negotiations by higher-level union representatives, who also wanted to keep the jobs in Indianapolis. The second-round offer included bonuses of $35,000 for GM workers who agreed to quit or retire and work for JD Norman for at least two years. Those who wanted to stay with GM and preserve their rights to transfer to another GM factory could do so.

Roob said he now expects Indianapolis officials will start working on a reuse plan, which may take four or five years.

"It's hard to see a silver lining in this cloud today," he said.

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