Layoffs slated at GM's Tonawanda plant
Plant Faces Job Loss Of Up To 30%
The General Motors Corp. engine plant in the Town of Tonawanda did not escape unscathed Monday when the auto giant entered Chapter 11 bankruptcy protection.
The plant will remain open, but it is facing layoffs of 25 to 30 percent of its work force — up to 261 people.
The cuts are linked to the phaseout of production of two of the engines at the site, said Steve Finch, the plant manager.
“We’re still working through the numbers, but it’s a pretty good estimate,” he said in an interview Monday.
The Tonawanda plant avoided the worst possible fate: appearing on GM’s list of 14 manufacturing plants that will close or be idled as part of its massive overhaul.
But the phaseout of the two engines will impact the Tonawanda site’s work force of 871 people. Based on Finch’s estimate, from 218 to 261 of the plant’s current workers could be affected. An additional 360 hourly workers are already on layoff.
Finch put the news into a short-term and long-term perspective.
“In the short term, obviously it’s a big blow in the volume and production that goes away,” he said. “If you look at the long-term view, the plant is part of the new GM. We’ll have floor space available for products. We have a very strong product offering that we currently have with the L-850 and inline four-and five-cylinder.
“The long-term view of the plant should be one of relative optimism.”
However, the plant’s status as a major employer in the region has been shrinking steadily during the last two decades. In 1989, the plant employed 4,350 people. As manufacturing has evolved and become more automated, jobs have been eliminated. The plant, which employed 3,400 in 2003, could be down to 610 workers after the layoffs.
Still, the outcome could have been far worse, said Patrick M. Heraty, professor of business administration at Hilbert College. “The fact that GM has confidence in them is a testament to the work they have done,” he said.
GM identified a dozen assembly, powertrain and stamping plants it will close or idle, in addition to two others previously announced.
John R. Buttermore, GM’s powertrain vice president for global manufacturing, said in a conference call that the Tonawanda site has been a “good plant, a big plant” for the company. It has earned good internal marks from the automaker for its productivity, quality, safety and labor-management relations, he said.
The plant will continue to make its leading product, the L- 850 2.2-liter engine. Last year, the four-cylinder product accounted for about half of the roughly 750,000 engines made at the site, and it fits with the increased emphasis on smaller, more fuel-efficient vehicles. The site also makes Vortec Inline 4 engines in relatively small volumes.
Bob Coleman, shop chairman for Local 774, United Auto Workers, said workers at the plant had mixed emotions about Monday’s developments. “They’re happy the plant’s [staying open], but they’re worried about their own jobs,” he said.
Coleman said he was confident that the Tonawanda plant could win new products that would create a need for more workers. By not being on the closing list, he said, “It gives us another day to get more product in there.”
Arthur C. Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations in Buffalo, had felt confident that GM would keep the Tonawanda plant open. He suggested that it could be a good match to produce engines for the new small car that GM plans to build in an idled U. S. plant.
While the layoffs are bad news, those workers at least have the chance to return in the event production picks up, Wheaton said.
The Tonawanda site expects to end production this week of the “high value” V-6 engine, which last year accounted for about 43 percent of the site’s total production volume. And by September, it plans to fill the last orders for the L-18 V-8 engine, which generated about 3 percent of the total volume.
The “high value” V-6 is used primarily in the Chevrolet Impala, as well as, in smaller volumes, in the Pontiac G6. GM has consolidated its V-6 production into a newer technology known as “high feature” V-6 engines, which are in a number of other GM facilities. “We just couldn’t afford to have two engines that basically overlapped each other,” Finch said.
The V-8 goes into medium-duty trucks, as well as non-GM industrial applications such as pumps and generators, and marine uses.
That engine had been slated to be phased out for several years, but its loyal customers kept persuading GM to continue production, albeit in small volumes.
“We’re very appreciative of those customers, but the bottom line is, the age of this engine and the cost to continue to produce it make it prohibitive,” Finch said.
Finch said that there has been no speculation about where new products might go but noted that the automaker’s goal is to fully use the manufacturing capacity it is keeping.
“If you read between all the lines, the fact that we’re not on the plant closing list, we now will have floor space because of the products that go away,” he said. “We’ll continue to perform and do the things we have control over in this plant to put us in a position for future decisions that the company makes.”
The Tonawanda plant had been designated to build a new 4.5-liter diesel engine starting this year, but GM has delayed that project indefinitely.
Finch said the plant is regaining its production role for a 3.7-liter inline five-cylinder engine, which could begin in July.
Finch said the return of that work could prevent some of the expected layoffs.
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