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Economic Ripples

Automakers' financial crisis affecting retailers near plant closures
JANESVILLE, Wis. -- As financially troubled automakers General Motors, Ford and Chrysler await word on a bailout from the federal government, the companies are idling nearly 60 factories nationwide for a month. The closings will have a ripple effect on nearby businesses, including convenience stores. When more than 1,200 workers at GM walk out of the assembly plant in Janesville, Wis., for the last time Tuesday, it will forever change the neighborhood business community. "It's going to have a huge affect on our business," Ed Francois, owner of the Jackson Street CITGO, told The [image-nocss] Janesville Gazette.
"Without those employees--customers--coming in and out of the GM plant, that will drop the traffic on the road that we depend on," he said. Francois estimated that 40% of his business comes from GM workers, and he sees no way to make up for the loss.

"We're always depending on that traffic, on that street, from neighbors and businesses," he told the newspaper. "But without the GM plant operating, that's going to be a huge reduction in traffic at that intersection."
To keep the fuel and convenience store open, Francois said he will have to cut costs, including payroll. "That'll be the only way we can make it," he said.

Francois said business has declined with employment at GM. "As the plant volume went down, so did the workers and so did the traffic that I depend on," Francois said.
And in another example of this ripple effect, automotive parts supplier Robert Bosch LCC is offering voluntary severance packages to about 1,300 employees at its auto parts plant in Anderson County, S.C., the plant's entire work force, as it seeks to reduce head count amid a sharp downturn in the industry, reported The Greenville News.

Harry Patel, the owner of a BP station in Anderson, said he is hoping the economy turns around. "The traffic's going to go down," he told the Independent Mail. "Hopefully gas prices remain low and people do a lot of traveling. Or somebody else takes over the plant."

He said he sees dozens of Bosch employees every day and estimates they spend about $200 to $300 inside his store each day and more at the pumps. Counting gasoline sales, he said that he expects to be out nearly $1,000 a day.
For a view of how the rest of the country is faring with the tough economic times, watch for Monday's CSP Daily News.

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