Business Notes Automobiles

General Motors finally dropped the other shoe. Two months after announcing that it planned to eliminate 74,000 jobs and shut down 21 plants, the leading U.S. automaker offered some details. At the same time, GM reported a $4.5 billion loss in 1991, an all-time record for any company.

While chairman Robert Stempel's downsizing scheme was designed to assuage Wall Street, it drew fire from the company's unions and the communities whose futures are now very much in doubt. The most emotionally charged reactions came from Michigan. GM's home base is targeted for half of the first round of 17,000 cutbacks and the closing of an engine plant in Flint and an assembly line in Willow Run in favor of an assembly line in Arlington, Texas. Michigan U.A.W. leaders raised the threat of strikes against further actions. Most industry analysts agree that GM needs to shrink its inflated bureaucracy and underutilized capacity. But is the company quietly crafting another strategy? Some GM sources suggest so. Plans to expand the Texas production site and relocate an engine plant from Moraine, Ohio, to Toluca, Mexico, indicate that GM may be planning to head for the friendlier, less unionized climes south of the border. The advantages include lower wage costs and relief from fuel- economy regulations. But amid the automaker's current "Buy American" campaign, there is the ironic prospect of some General Motors products eventually being reclassified as imports from Mexico.