GM future questioned as gloom hits closure town

Gloom is spreading across Moraine, Ohio, as General Motors Corp prepares to shut a sport-utility vehicle plant two days before Christmas, abandoning a factory in the Dayton suburb of 7,000 that stretches back to making refrigerators in 1921.

"The whole town is going to be devastated," said Cathy Miller, who pours drinks at the Upper Deck sports bar across the street from the plant, where employment has fallen from 4,200 to 1,200 in two years.

Sales of Moraine's truck-based Chevy TrailBlazer, GMC and Saab SUVs have skidded in a US economy whipsawed by a credit crunch and $4-a-gallon gasoline. While the Detroit-based automaker said in June it would close the factory in two years, the company said on Oct 3 the last day would be Dec 23. GM announced on Monday day it will also shut an SUV plant in Janesville, Wisconsin two years ahead of schedule. The closures come as the company held preliminary discussions with closely held Chrysler LLC about combining their money-losing operations, according to five people with direct knowledge of the talks. Merger talks and retrenchments by the world's largest automaker are signs that the 100-year-old company's continued existence may be in doubt, said Erich Merkle, an analyst with Crowe Horwath LLP, a consulting firm in Oak Brook, Illinois. "It's possible, as much as I hate to say it," he said. "Emotionally, I don't want to think so. Rationally and logically, I can't rule it out."