The Buffalo News, May 8, 2008, Thursday

The Buffalo News

May 8, 2008, Thursday

The Buffalo News

Tonawanda forge again threatened; Plant was in jeopardy in 1985 and 1992

By Matt Glynn
Updated: 05/08/08 6:49 AM

Originally part of General Motors Corp., the auto parts forge in the Town of Tonawanda has been part of the town’s manufacturing base for 54 years. American Axle & Manufacturing bought the forge in 1994. More Photos

The American Axle & Manufacturing forge in the Town of Tonawanda, caught up in an autoworkers strike and reportedly at risk of closing, has faced uncertainty before.

When the forge was part of General Motors, GM announced plans in 1985 to close most of the Kenmore Avenue operation. GM later dropped the idea.

Then, in 1992, GM confirmed the forge was on the market. Workers protested the sale plan, fearful that a new owner might cut jobs and wages. But if a buyer couldn’t be found, there was speculation the plant could be shut down.

American Axle bought the forge in 1994, delivering stability and new investment. But now the company has reportedly raised the closing threat, amid a United Auto Workers strike that began Feb 26. However, company officials, who are still trying to reach a new labor agreement with the UAW, have not made any announcements about the plant’s future.

The forge has been a staple of the Town of Tonawanda’s manufacturing base since it began production 54 years ago under GM.

The forge had a total of 530 unionized and nonunionized employees early this year, before the strike began. Most of those employees are now outside the gates, with 392 UAW-represented workers on strike and about 80 Machinists members honoring the picket line.

Anthony Caruana, supervisor of the Town of Tonawanda, said he was worried about the forge’s future but was hoping it might survive. If the plant were to close, he said, “it would certainly have an impact on those 500 families.”

In the early 1990s, the forge, as well as a gear and axle plant in Buffalo, were reported as “starved for investment” when GM was seeking a buyer for them.

As the new owner, American Axle quelled local workers’ fears by unveiling plans for pouring in millions of dollars in investment. But any growth plans for the local plants stalled as the company moved more production outside the U. S. The Buffalo plant was idled late last year.

The acrimony over the strike obscures the fact that several years ago, the labor-management relationship at the forge was viewed as a model of cooperation.

The forge was included in the “Champions at Work” report prepared by the Cornell University School of Industrial and Labor Relations and released in 2000. The study found the region had a highly productive work force, and spotlighted 15 employers, most of them unionized, where labor and management were working together effectively.

“American Axle improved the equipment at the (forge) and provided the job security that workers were looking for,” the study said. There was a new emphasis on training programs for quality and safety, as well as job skills development.

A $1 million education and health center opened at the site in 1998, with the company and UAW both committing to supporting programs there. The new facility buoyed hopes about the company’s long-term commitment to the location.

When GM owned the site, the forge was the launch point in 1986 for an innovative program that educated union members and managers about auto industry trends, said Art Wheaton, director of Buffalo labor studies at the Cornell School of Industrial and Labor Relations. The program later was spread throughout GM.

Wheaton said the forge over the years built a good reputation for its union and management leadership. Kevin Donovan, now assistant director of UAW Region 9, was formerly president of UAW Local 846 at the forge, and has helped develop industry education programs, Wheaton said.

Under American Axle, the forge has received considerable economic incentives, including millions of dollars in state grants for worker training. The New York Power Authority provides the forge with three allocations of discounted power that add up to 7,150 kilowatts.

“The state Assembly, specifically, has gone to great lengths to provide job training grants over many years to maximize the skills of the American Axle work force,” said Assemblyman Robin Schimminger, D-Kenmore.

The grants have helped workers adapt to new processes and deal with issues like worker turnover and retirements, he said.

Even so, the plant’s future is considered at risk.

“Certainly if things turn out badly in the days and weeks ahead, it will be a great disappointment,” Schimminger said.

Michael Cuviello, president of the Ken-Ton Chamber of Commerce, said the organization is trying to determine just how much business the forge generates for area vendors.

While a closing would be terrible news for the workers’ families, he said, the impact wouldn’t be felt solely in the Town of Tonawanda, since the forge’s employees come from around the region.

Michele Iannello, a Democratic Erie County legislator whose district includes the forge, said she has been supportive of the UAW in the strike and has met with members on the picket line.

“It’s very important for us not to lose any jobs,” she said. “But it’s just another example of the deterioration of the middle-class working people in Western New York.”

If the forge does close, Iannello said, job retraining and education would be vital to help the affected workers make the transition.

“They want a decent wage for their work,” she said. “They’re willing to bargain but it seems that no matter what they’re saying, it’s not enough. You can’t expect these people to work for peanuts.”

The forge’s economic impact is also felt on the tax rolls. The town assessor’s office says the forge is scheduled to pay about $265,000 in local and school taxes this year for two parcels.

The forge’s assessed value, at current equalization rates, is about $2.55 million, based on the value of the land and buildings. The properties’ combined market value is $4.95 million.

During the walkout, longtime hourly workers have lamented that American Axle in recent years has failed to adequately maintain or invest in the plant’s equipment and machinery.

Renee Rogers, an American Axle spokeswoman, said American Axle has invested $3 billion in its U. S. plants since its formation. “Tonawanda has obviously gotten its share,” she said. Rogers said she did not have a specific figure for that site, but said plant safety and modernization were “critical elements” for the company.

Striking workers describe their jobs inside the forge as physically demanding and potentially dangerous — one reason some thought it unlikely the company would attempt to use replacement workers. Summertime temperatures inside, they say, can reach 120 degrees.

Whether the Tonawanda forge can survive yet again remains to be seen. Caruana said he has tried to reach out to the company through the town’s economic development organization, as well as appealing to the upstate office of Empire State Development Corp.

“Anything else we can do to help keep them here, we are certainly going to try,” Caruana said.

mglynn@buffnews.com