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Obama Administration Plans to Re-Develop Closed GM Plants

5/18/2010
 
When General Motors announced plant closings last year, local communities got hit with a double whammy. Not only were they losing jobs and taxes, but they could be stuck with decaying buildings and polluted soil suitable for no other use.

The White House says it has a solution. Today, President Barack Obama's administration will announce an $800-million-plus proposal to clean up closed GM factories and remove environmental hazards.

If approved by the bankruptcy court overseeing the wind-down of GM's shunted operations, the fund would pay for cleanup, demolition where needed, and related services -- everything to convert the factories from so-called brownfields into any use a community or new company wishes, whether a new factory, film studio or office park, said a senior administration official. The official spoke on condition of anonymity Monday because the plan will not be announced until today, during a "summit" on the future of auto communities, co-sponsored by the White House and Brookings Institution.

The majority of facilities affected are in Michigan, but several GM-owned parcels in Ohio could get environmental cleanup help, including the soon-to-close Mansfield Stamping Plant. Others could include GM-owned property in Parma, Elyria, Lordstown, Toledo and Moraine. Mansfield is GM's only Ohio plant that will close entirely, but the other locations have buildings or excess land that GM does not want, according to a company list. The Obama administration would not discuss plans for individual sites.

The environmental fund would include $536 million for cleanup and $300 million for demolition, property taxes and various wind-down fees for 90 sites in 14 states altogether, the official said. This is money already set aside, he said, when the federal government made a commitment last year to help the automaker shed its unprofitable business lines and create a new General Motors through a structured bankruptcy. Taxpayers helped subsidize the restructuring by assuming the old company's debt, some of which GM has repaid already and some of which was converted to preferred stock that the government owns.

Asked if additional taxpayer money might be needed for the cleanup, the official said, "Our belief is that the funds available will be sufficient to achieve environmental closure."

Spending of the cleanup fund would be overseen by a trustee, with input from the U.S. Environmental Protection Agency, state and tribal agencies, and local communities. The Obama administration hopes to get approval from states and the bankruptcy court and begin work by the end of the year.

The cleanup proposal applies only to GM plants and not to the smaller bankruptcy restructuring of Chrysler. While Chrysler's bankruptcy will have a greater impact on Northeast Ohio with next month's scheduled closure of its Twinsburg stamping plant, that automaker had fewer plant closings than GM.


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