GM plant changes tracks
Posted: Wed Jan 12, 2005 11:32 am
GM plant changes tracks
A U.S. investment firm is buying the London train locomotive builder.
NORMAN DE BONO,
Free Press reporter
2005-01-12 02:54:48
Train locomotive builder General Motors Electro-Motive has been sold. The London industrial institution, in its 55th year, has been bought by Greenbriar Equity Group, a U.S. investment firm, in a deal believed to be worth about $500 million US, Canadian Auto Workers union president Buzz Hargrove said last night.
The sale price includes the sprawling London plant and another one in LaGrange, Ill.
"We knew this was coming, but I'd be a liar if I said I wasn't disappointed they have chosen to sell us," said Terry Mason, chairperson of CAW Local 27. "(The new owner) will invest in the plant and sell us again. In the long term, this is just back to square one, us not knowing who we will be sold to."
The deal ends years of uncertainty for GM workers. The plant has been rumoured to be on the block and nearly sold to different suitors several times.
"We are very busy this year," Mason said. "We are hiring right now. It's nice to know that while GM wants to get out of this business, our customers still have confidence in us. We can be optimistic the orders are there."
The deal was praised Hargrove, who said GM was not investing in the plant, and Greenbriar has said it will.
"I feel very positive about it," said Hargrove, who will be in London to address the workers today. "GM is winding down its operations other than its mainstream vehicles and there has been less money available for other businesses.
"That was a detriment to our membership," said Hargrove.
Greenbriar has told the CAW it wants to invest in and grow the business and then sell it in five to seven years.
"We have someone buying it who wants to build, who has a business plan and commitment. That is good for our members," Hargrove said.
The union leader was also unfazed by the prospect of the company being flipped n a few years, saying volatile ownership isn't unusual in business.
"I never worry about who owns it. I have been through this so many times that changing hands is just a reality of life. The important thing is there is a commitment to our members and the business."
Greenbriar Equity Group is a $700-million US equity fund run by former Chrysler Corp. vice-chairperson Gerald Greenwald and Boston-based Berkshire Partners, a $3.5-billion US buyout fund.
"I have known Greenwald for 25 years. He is a man of great integrity and very smart," Hargrove said.
GM Electro-Motive builds about 300 locomotives a year, mainly in four different models, valued between $1.4 million and $1.9 million each, said Mason.
The plant employs about 1,000 workers, 657 of which are CAW members, he added.
Curt Swenson, Electro-Motive spokesperson in Illinois, and Greenwald could not be reached for comment last night.
Ravi Samuel, chairperson of the Southwestern Ontario board of the Canadian Manufacturers and Exporters, called the sale the end of an era, recalling a time when GM owned two London plants employing about 3,000 workers.
"It has been one of the major employers in the London area," Samuel said. "Over the years, it has had such a significant history. It is a major loss of an auto company, but we can only hope the new owner continues to produce locomotives and grows the market."
In 2002, GM Defense in London was sold to U.S. defence giant General Dynamics, becoming General Dynamics Land Systems Canada in a $1.1-billion US deal.
COMMUNITY REACTION
- London Mayor Anne Marie DeCicco: "One of my first priorities tomorrow is to follow up. We want to ensure the jobs are secure."
- John Kime, president of the London Economic Development Corp.: "I don't think we'll be too long in getting in touch with the new owners to make sure they are comfortable in London."
http://www.canoe.ca/NewsStand/LondonFre ... 8-sun.html
A U.S. investment firm is buying the London train locomotive builder.
NORMAN DE BONO,
Free Press reporter
2005-01-12 02:54:48
Train locomotive builder General Motors Electro-Motive has been sold. The London industrial institution, in its 55th year, has been bought by Greenbriar Equity Group, a U.S. investment firm, in a deal believed to be worth about $500 million US, Canadian Auto Workers union president Buzz Hargrove said last night.
The sale price includes the sprawling London plant and another one in LaGrange, Ill.
"We knew this was coming, but I'd be a liar if I said I wasn't disappointed they have chosen to sell us," said Terry Mason, chairperson of CAW Local 27. "(The new owner) will invest in the plant and sell us again. In the long term, this is just back to square one, us not knowing who we will be sold to."
The deal ends years of uncertainty for GM workers. The plant has been rumoured to be on the block and nearly sold to different suitors several times.
"We are very busy this year," Mason said. "We are hiring right now. It's nice to know that while GM wants to get out of this business, our customers still have confidence in us. We can be optimistic the orders are there."
The deal was praised Hargrove, who said GM was not investing in the plant, and Greenbriar has said it will.
"I feel very positive about it," said Hargrove, who will be in London to address the workers today. "GM is winding down its operations other than its mainstream vehicles and there has been less money available for other businesses.
"That was a detriment to our membership," said Hargrove.
Greenbriar has told the CAW it wants to invest in and grow the business and then sell it in five to seven years.
"We have someone buying it who wants to build, who has a business plan and commitment. That is good for our members," Hargrove said.
The union leader was also unfazed by the prospect of the company being flipped n a few years, saying volatile ownership isn't unusual in business.
"I never worry about who owns it. I have been through this so many times that changing hands is just a reality of life. The important thing is there is a commitment to our members and the business."
Greenbriar Equity Group is a $700-million US equity fund run by former Chrysler Corp. vice-chairperson Gerald Greenwald and Boston-based Berkshire Partners, a $3.5-billion US buyout fund.
"I have known Greenwald for 25 years. He is a man of great integrity and very smart," Hargrove said.
GM Electro-Motive builds about 300 locomotives a year, mainly in four different models, valued between $1.4 million and $1.9 million each, said Mason.
The plant employs about 1,000 workers, 657 of which are CAW members, he added.
Curt Swenson, Electro-Motive spokesperson in Illinois, and Greenwald could not be reached for comment last night.
Ravi Samuel, chairperson of the Southwestern Ontario board of the Canadian Manufacturers and Exporters, called the sale the end of an era, recalling a time when GM owned two London plants employing about 3,000 workers.
"It has been one of the major employers in the London area," Samuel said. "Over the years, it has had such a significant history. It is a major loss of an auto company, but we can only hope the new owner continues to produce locomotives and grows the market."
In 2002, GM Defense in London was sold to U.S. defence giant General Dynamics, becoming General Dynamics Land Systems Canada in a $1.1-billion US deal.
COMMUNITY REACTION
- London Mayor Anne Marie DeCicco: "One of my first priorities tomorrow is to follow up. We want to ensure the jobs are secure."
- John Kime, president of the London Economic Development Corp.: "I don't think we'll be too long in getting in touch with the new owners to make sure they are comfortable in London."
http://www.canoe.ca/NewsStand/LondonFre ... 8-sun.html