Turbulence in auto industry leads some to worry, cut back

By Brian C. Louwers
C & G Staff Writer

WARREN —David Yono hoped for prosperity when he opened the doors of his new business 12 years ago.

The owner of Pay Day Food Store, directly across Mound Road from Chrysler LLC’s Warren Truck Assembly plant, envisioned workers coming in to buy things like food and drinks, newspapers and lottery tickets before or after their shifts, or on their lunch breaks.

What he probably never envisioned, what many probably never did, was the potential failure of one or more of the state’s Big Three automakers.

As leaders from Warren to Lansing, to Washington, D.C., continued to scramble for answers this month — searching for a way to at best control the growing crisis at Ford Motor Co., General Motors Corp. and Chrysler LLC, and at worst to brace for the potential devastating effects their bankruptcy could cause — business owners near local auto plants said they would continue to do whatever they could to keep going.

Still, most said there were limits to what they could do if the unthinkable should happen.

“It’s better if they [Chrysler] don’t join up with GM. It’s better that they go with one of the other car companies,” said Yono, of Keego Harbor, about the rumors swirling of a potential merger between Chrysler and another automaker.

Yono said he and his customers, many of whom obviously work at the plant, fear that a GM-Chrysler merger would doom Chrysler’s plant on Mound.

“Let’s hope they don’t team up with GM. If they do, it’s going to be big problems,” Yono said.

But even still, it’s not just the big companies he’s worried about. The slow death of suppliers, squeezed out by cumulative cuts in automotive contracts, have all cut into his business.

“It’s not just these guys, the big ones, but a lot of the smaller factories are closing down in the last few years,” Yono added. “If you go to Nine Mile, most of them are closed down.”

All told, Yono said he’s lost about 20 percent of his business over the last two years. If Chrysler were to shut down the plant across the street, he said, it would likely go down 50 percent.

Asked if his business could survive a hit like that, he paused and said, “Probably not.”

Down the road from Yono’s store, the plight of the automotive tier suppliers, restaurants and other businesses tied to the fate of the region’s automakers was on the mind of Diane Lawrence, of China Township, whose mother owns Fran’s Roadhouse.

Lawrence said she worked for a Tier 1 auto supplier before but was laid off. Now unemployed, she supports her mother’s efforts to keep the family’s business afloat.

“This is a Chrysler bar,” Lawrence said about her mother’s flow of customers, which had slowed to a trickle during lunch hour this month as Chrysler employees braced for the news of the day. “There’s lots of rumors going on at Chrysler, rumors and speculation. There’s rumors of anything from a month to 16 weeks off.”

Lawrence and her mother, Fran Wolf, said the bar was once filled “wall-to-wall” with employees after work and during lunch hour when Fran bought the place in 1995. Business slowed in the years that followed, and Lawrence said her mother’s business first started hurting when Chrysler became DaimlerChysler, and employees were no longer able to leave during lunch.

With the growing uncertainty about Chrysler’s future, the bar is struggling to keep its doors open as long as the owner would like.

Wolf said her business is down a whopping 87 percent, and that she made $69 on one day this month. From that, she paid her bartender. She said it’s hard to imagine what would happen if the plant were to close for any substantial length of time.

“I don’t know. I’d be running eight hours maybe,” Wolf said. “Maybe I’d close for a little while. I have no idea.”

North of I-696, businesses in the shadow of the GM Technical Center have likewise felt the impact of cuts at the sprawling automotive engineering complex.

Beverly Suida said her grandfather first opened the Victory Inn on Mound in 1947. Named after the victory won by Allied forces in World War II, the business is currently fighting for its own survival in uncertain times.

While some cuts have been only temporary, GM’s reductions to its workforce at the Tech Center in the last two years have been felt in the Victory’s bottom line.

Suida, one of the Victory’s current owners, said there are rumors now of a shutdown at the Tech Center from Thanksgiving through the first of the year.

“If that happens, the city of Warren is in dire straits,” she said.

And even though her grandfather operated her business at its current location before the Tech Center was even built, Suida said she could not imagine continuing business as usual if the company were to file for bankruptcy in the future.

Business at the Victory Inn is already down about 20 percent. If the Tech Center were to close for any significant length of time, Suida said she’d lose 35-40 percent of her lunch business.

“That would be devastating. I don’t know if I’d make it, to tell you the truth,” Suida said. “I’d have to cut labor, cut help. It’d be the first layoffs ever at the Victory in 70 years.”

You can reach Staff Writer Brian C. Louwers at brianlouwers@candgnews.com or at (586) 498-1089.