Buffalo News (New York), January 21, 2009, Wednesday

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Buffalo News (New York)

January 21, 2009, Wednesday

CENTRAL EDITION

HEADLINE: Layoffs spread through local auto plants; Nearly 600 workers are off the job

BYLINE: By Matt Glynn - NEWS BUSINESS REPORTER

BODY:

The area's major auto manufacturing plants are putting about 600 workers on layoff to cope with production cutbacks, as new-vehicle sales remain mired in a slump.

Just when those laid-off workers might be called back isn't clear, since the plants' workloads depend on demand for new cars and trucks.

"It's all due to production volume decreases," said Nina Price, a spokeswoman at General Motors' Town of Tonawanda engine plant.

Under the United Auto Workers contract, laid off workers are paid about 95 percent of their wages while out of work.

The GM engine plant will lay off about 340 of its 1,130 hourly workers for starting Jan. 26, Price said. The layoffs are for an indefinite amount of time, she said, since they are tied to production needs.

If the plant's production needs increase, she said, "possibly those employees will be called back to work."

At Delphi Corp.'s Town of Lockport plant, 175 of its 1,540 hourly workers received layoff notices last Friday, said Gordie Fletcher, president of UAW Local 686 Unit 1.

Ford Motor Co.'s stamping plant in Hamburg has 75 of its roughly 800 workers on layoff, and is preparing for a weeklong shutdown in early February, said Charles Gangarossa, president of UAW Local 897.

No one in the industry is predicting a quick turnaround. Forecasts for U.S. auto sales in 2009, on top of a weak 2008, are gloomy.

Fletcher said he has "no idea" when the laid-off workers at Delphi will be brought back. "Obviously our hope is that we bring everyone back," he said. "The current state of the economy is putting a crunch on everybody."

Claudia Piccinin, a Delphi spokeswoman, said the automakers' production schedules are constantly changing, and Delphi constantly has to adjust the size of its work force to keep up.

Ford's stamping plant along Route 5 is closely connected to Ford assembly operations in Oakville, Ont., and St. Thomas, Ont. Among the vehicles it supplies stamped parts for are the Ford Edge, Lincoln MKX and Ford Flex.

Gangarossa said the Oakville and St. Thomas operations will shut down production for one week starting Feb. 2, and that the Hamburg plant will close that same week as a result.

A number of assembly and components plants went through a similar process around Christmas and New Year's, extending their normal holiday shutdowns to cut production.

"We just hope things get better with the new president" and the stimulus package President Barack Obama has laid out, Gangarossa said. "Hopefully the economy will get better and people will start buying American vehicles."

Art Wheaton, director of labor studies at Cornell University's School of Industrial and Labor Relations in Buffalo, said while layoffs are never good news, the area's plants are holding up better than many others in the industry around the country.

"I think it says it's good that they're taking it slow on the slowdowns," Wheaton said, noting that some other plants have taken more drastic steps to cope with the downturn.

"The products are still valuable," he said.

The area's auto plants have reduced the size of their work forces through attrition and buyouts over the years. The local plants have also enjoyed mostly good labor-management relations "to work through what is needed" in order to remain competitive, Wheaton said.

Under terms of their labor contracts, most of the UAW members will receive about 95 percent of their pay and benefits while on layoff, a combination of unemployment benefits and supplemental benefits provided by the automakers, Wheaton said.

Those types of benefits provided to UAW members are under scrutiny as General Motors and Chrysler put together restructuring plans required by the government for the loans they are receiving to stay afloat, he said.

The industry slowdown is being felt in another way at the GM engine plant in Tonawanda. The automaker is delaying the start of production of the "Duramax" 4.5-liter engine that was expected to get under way later this year, Price said. GM has not announced a new launch date for the line but the Tonawanda plant is still GM's choice to produce the engine, she said.

The $100 million new investment, which was announced in June 2007, was not projected to create new jobs, but it was viewed as another way of shoring up the plant's viability. Early last year, GM announced it was canceling a V-8 gasoline engine line that was also planned for the River Road site.

e-mail: mglynn@buffnews.com

GRAPHIC: Buffalo News file photos GM Tonawanda Engine Plant: 340 of 1,130 Delphi Corp. in Lockport: 175 or 1,540 Ford Stamping Plant in Hamburg: 75 of 800

LOAD-DATE: January 21, 2009