Share this article

print logo

AREA PLANTS REAPING THE BENEFITS OF A BOOM IN THE AUTO INDUSTRY

The L850 engine produced in Tonawanda will do something that General Motors engines rarely do -- it will cross the Atlantic. A European version of the four-cylinder engine will ship in July for Opel.

The rare export business is a plum for the factory's newest and most efficient production line.

"The numbers we project . . . would make us the most competitive four-cylinder engine in North America," L850 Business Team Leader Chris O'Sullivan said. The 200 workers on the L850 make 400 engines a day.

GM's Powertrain engine plant and other auto components makers in Western New York expect high levels of production to continue in 2000 -- although not necessarily as high as in 1999, a record sales year for the auto industry.

Having completed new labor agreements last fall, components plants can expect four years of labor peace as they try to expand their base of business. Of the area's major components companies, only American Axle & Manufacturing still faces negotiations on a national contract, which expires next month.

But for most companies, the growing sales don't translate into higher employment. Part makers continue to squeeze efficiency gains from their operations, cutting prices to hold onto their current business. Many area plants need to win new contracts just to replace workers heading into retirement.

"We would love to see (additional) hiring," United Auto Workers Buffalo Area Director Kevin Donovan said. "The unfortunate thing is that the companies will never do that, because it's a cyclical business."

The cycle peaked in 1999, putting a heavy load on area auto workers. The average work-week for the transportation equipment sector, chiefly auto components, was nearly 48 hours during the first 10 months, according to the state Labor Department. That's about an hour longer than 1998's average.

And the hours lengthened as the year progressed. October's work-week topped 50 hours, signaling that the year-end average could be higher once November and December results are included.

"Every location is working a great deal of overtime," Donovan said.

Delphi Harrison Thermal Systems in Lockport and Ford Motor Co.'s Buffalo Stamping Plant in Hamburg both hit record production volumes in '99, company officials said. Ford processed 1,248 metric tons of steel at the stamping plant, up 10.4 percent from the year before.

The heated activity isn't restricted to the big plants. Second-tier suppliers, like Ultra Tool & Plastics in Amherst and Automotive Corp. in LeRoy, formerly LeRoy Industries, saw overtime hours and worker recalls as well, Donovan said.

Job growth eluded the sector though, which stood at 13,500 workers in November, about the same as 1998's average. The figure, which was above 20,000 in 1986, has been steadily shrinking as plants improve productivity. The sector's definition, however, doesn't count thousands of workers in metal shops and plastics factories who produce some auto components.

While its L850 production steamed toward top speed, GM Powertrain in Tonawanda ended the year awaiting word on another new engine. In December, members of UAW 774 approved a new local contract for the plant. The action removed an impediment to the potential announcement of a major expansion of the plant.

"We feel this new contract puts us in a position to attract new business while continuing to satisfy our customers," Plant Manager Arvin Jones said in a statement.

The site on River Road -- GM's largest engine plant with 3,800 workers -- produced 1.86 million engines in 1999, compared to 1.6 million in 1998. However, the production didn't mark a record. Earlier years with higher totals -- 2 million in 1995 -- saw higher production of six-cylinder motors.

At Delphi Harrison Thermal Systems in Lockport, some 700 workers were hired in 1999, while 800 workers retired, company officials said, leaving employment at about 6,000. The relative stability ended concerns that separation from GM -- completed in May -- would launch an exodus. The deadline for Delphi workers to retire with a GM pension passed on Jan. 1.

A big part of the reason was the labor contract between the UAW and Delphi, a virtual carbon-copy of labor's pact with GM.

"That alleviated a lot of fears people had," Delphi Harrison President Ronald Pirtle said.

The company, part of the newly independent Delphi Automotive Systems Corp., is beginning to attract more non-GM customers, he said.

"Our division won its fair share of new business," he said.

The Lockport factory, one of the area's largest private employers, named George S. Mayes Jr. as its new site manager, replacing James R. Frost.

The labor contracts signed by Delphi and by the Big Three automakers mean a lucrative four years for UAW members. Hailed as the richest contract for autoworkers in 20 years, it pays raises of 3 percent a year plus a $1,350 signing bonus.

Running against the trend of shrinking employment is American Axle & Manufacturing. The Detroit-based company announced a new plant in Cheektowaga that will employ up to 120 people once it ramps up this year. American Axle has about 2,700 workers at its present locations, in Buffalo and the Town of Tonawanda.

In December the company announced a contract to supply Daimler/Chrysler, meeting a key objective of reducing its dependence on GM. The automaker, American Axle's parent before a 1994 spin-off, will represent 79 percent of its business, down from 85 percent.

In disfavor for much of 1999, newly issued stock in American Axle and Delphi Automotive should see a bounce this year, predicted industry analyst Richard J. Hilgert at First of Michigan Capital Corp. in Detroit. To meet 1999's voracious demand, factories incurred high costs for unscheduled overtime and express shipping, he said. Slightly slower sales could remove some cost pressures and put components makers closer to their "sweet spot" in profitability.

"I think in 2000 there'll be a rising tide that will lift all boats," Hilgert said.

There are no comments - be the first to comment