GEM lays off 100

Fargo's Global Electric Motorcars will lay off 100 of its 185 workers over the next two months, GEM and DaimlerChrysler officials said Monday.

The company's production line for its battery-powered vehicles was idled Monday as workers were told who would stay and who would go, company officials said.

The layoffs, classified as permanent, are needed for the company to stay competitive in the neighborhood electric vehicle market, GEM President Rick Kasper said. Most of the cuts will fall on production workers, he said.

GEM was purchased by DaimlerChrysler in October 2000.

DaimlerChrysler then dramatically boosted GEM's production by ordering about 15,000 GEM vehicles to help meet federal Clean Air Act standards for its overall fleet. The move also helped satisfy laws in states such as California for automakers to build low- or no-emissions vehicles.

In addition, many vehicles were sold at discount or donated to seed the market and create future demand, said GEM Marketing Director Steve Shark.

Under the DaimlerChrysler contract, which ends Sept. 30, GEM built more machines than the market could bear, Kasper said.

"This action is necessary to return GEM's work force to a size more consistent with the current demand for its NEV products," said Kasper, who spoke to employees Monday morning. "This is a difficult responsibility, but it is the right thing to do for our company to be strong and go forward."

January's threatened recall of GEM vehicles by the National Highway Traffic Safety Administration -- averted with the help of North Dakota's congressional delegation -- had no bearing on Monday's decision, he said.

Workers were offered a severance package and some health benefits.

Job placement counselors will be at the plant today, Kasper said.

"I'm very disappointed with the layoffs," said Rep. Earl Pomeroy, D-N.D.

"Fortunately the economy in Fargo continues to be strong."

Pomeroy said Kasper told him DaimlerChrysler is committed to the GEM line.

The firm has added substantial production capacity in the last year, Pomeroy said, which should make it attractive to firms needing production facilities as the economy rebounds.

"They're perfectly positioned. We have a facility that is ready to go with state-of-the-art assembly- ine manufacturing," the congressman said.

Talks are under way to build snowmobiles at the Fargo GEM plant.

In June, GEM and Redline Snowmobiles of Vista, Calif., announced they were negotiating to build Redline's first production model sleds. Those talks were extended until mid-August.

Kasper said if an agreement can be reached with Redline, some people may not be laid off or could be called back to work.

The new federal energy bill, now headed to conference committee, also could boost production.

The Senate's version of the bill designates GEM cars as alternative fuel vehicles, making them eligible for federal fleet programs, said Barry Piatt, communications director for Sen. Byron Dorgan, D-N.D.

Kasper said GEM is aggressively promoting the vehicles for master-planned communities, retirement communities, college campuses, office complexes, industrial parks and the military.

According to the Fargo city assessor's office, GEM now receives five-year 100 percent property tax exemptions for its main plant at 1301 39th St. N.W. and a shipping facility at 3225 12th Ave. N.

The exemptions were approved Aug. 20, 2001, and cover the 2002 through 2006 tax years, said Deputy Assessor Mitch Marcuson.

The main plant gets an annual tax break of $86,000, based on an assessed value of $3.48 million.

The shipping facility break is $62,000 on an assessed value of $2.5 million.

An employee of the North Dakota Tax Department said Monday that she could find no state property tax exemptions for GEM or DaimlerChrysler.

Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583