The Buffalo News, October 15, 2008, Wednesday

The Buffalo News

October 15, 2008, Wednesday

The Buffalo News

Engine plant looks safe as GM cuts back; Plant not tied to doomed factories

By Matt Glynn NEWS BUSINESS REPORTER

General Motors is hastening cutbacks in some of its manufacturing operations as it copes with an enduring slump in auto sales, but the decisions are not affecting its Town of Tonawanda engine plant.

GM will close a stamping plant in Michigan at the end of next year and stop SUV production at a Wisconsin plant by the end of this year, sooner than expected. Earlier this month, GM said it would accelerate the previously announced closing of an assembly plant in Moraine, Ohio.

GM has been mum on any plans for additional factory closings. While the Tonawanda plant on River Road supplies engines to several vehicle assembly plants, the factories in Janesville, Wisc., and Moraine, Ohio, headed for shutdown are not among them, said Nina Price, a spokeswoman for the Tonawanda engine plant.

GM previously announced the Wisconsin plant would close by 2010. This week, the automaker said a sharp dropoff in SUV sales prompted it to act more quickly. While SUV production will end there Dec. 23, the plant will maintain a small work force until May or June 2009 as it finishes filling orders for Isuzu.

As for the Grand Rapids stamping plant, 40 percent of its parts were for large pickups and SUVs and mid-size SUVs. GM said it has less need for those parts as demand for those vehicles has fallen.

Whenever GM makes significant changes in production, questions typically arise about how the Tonawanda engine plant might be affected. And with good reason: the plant has nearly 1,400 hourly and salaried employees, a key part of the region’s auto manufacturing base.

“We’re pretty steady on our production numbers,” Price said, adding that none of the plant’s workers is presently on layoff.

Sal Morana, president of United Auto Workers Local 774, which represents hourly workers at the plant, said he was encouraged that some of the vehicles it supplies with engines, such as the Chevrolet Cobalt, have seen an uptick in sales amid a tough climate.

“Right now, we’re OK,” Morana said.

But at the same time, he said, he feels anxiety based on the economy’s health. “You have some nervousness because we have product lines that are scheduled to be OK for a few years, but that can change in a heartbeat because of the state of the economy,” Morana said.

Art Wheaton, director of labor studies at the Cornell University School of Industrial and Labor Relations in Buffalo, said he doesn’t consider the Tonawanda engine plant at risk of being shut down, but he feels it could see continued worker attrition or production cutbacks if GM’s overall sales don’t improve.

“I think the Tonawanda plant should be OK,” Wheaton said. “I don’t think there will be a large-scale reduction.”

A few factors are in the Tonawanda plant’s favor, he said. For one, it isn’t too far from some of GM’s operations. GM said the Grand Rapids plant’s long distance from other GM plants, compared to some other stamping plants in its network, was one reason for its impending shutdown.

The Tonawanda plant also has a diverse mix of engines, so its fortunes aren’t dependent solely on the popularity of trucks and SUVs, he said. “You can adapt” with such a lineup, Wheaton said.

In contrast, the Janesville, Wisc., assembly plant primarily makes large SUVs.

The Tonawanda site also has in its favor a highly skilled worked force and has earned a reputation for labor-management cooperation over the years, Wheaton said. The Harbour Report, an industry scorecard, has given the plant high marks for its efficiency.

The plant has been able to secure new engine lines as older engines are phased out, maintaining its viability. It was awarded a diesel engine for trucks that is expected to go into production next year. But earlier this year, GM pulled the plug on a new V-8 engine line also scheduled for

Tonawanda, citing high gas prices and tougher fuel economy standards.

The Associated Press contributed to this report. mglynn@buffnews.com