Industry experts expect that General Motors Corp.'s restructuring plan will lead to some additional plant closings, but the automaker's Town of Tonawanda engine plant appears to be on safe ground.
"We think it's in good shape," said Michael Omotoso, senior manager of global powertrain for J.D. Power and Associates. "We don't think it's going to close."
GM is due to submit a viability plan to Congress by Tuesday. The automaker is working on reducing its U.S. hourly and salaried work force, but analysts also expect GM will have to shut more facilities, due to excess production capacity resulting from reduced auto sales.
The Tonawanda plant's name has not come up in published reports speculating on GM plants that could be headed for shutdown. Vehicle assembly plants are more commonly mentioned as closing targets.
But whenever GM unveils big news, questions naturally arise about what the developments mean for the River Road plant. With about 1,340 hourly and salaried employees, it is a mainstay of the local manufacturing economy through jobs, taxes paid, dollars spent on suppliers and charitable contributions by workers.
Steve Finch, the plant manager, said he understands the interest from both the work force and the public about the site's future with GM. Those types of decisions rest with GM's corporate leadership, based on choices the executives make about production levels and which types of vehicles to commit resources to, he said.
"We don't know of anything right now that puts us on a closing list," Finch said.
Meanwhile, the facility is working hard to maintain its viability, he said. "I feel confident we're doing as much as we can to do the right things to keep the plant in the mix," he said.
Sal Morana, president of United Auto Workers Local 774 at the site, said the plant scores high in GM's ratings in areas like productivity and safety. He feels positive about the plant's performance, but admits it is difficult to look too far into the future, given the fluid state of the industry.
"I think Tonawanda's in fairly decent shape, but that could change tomorrow," Morana said.
Omotoso said while he considers the Tonawanda plant on good ground, he expects to see its production volumes fall over the next few years in line with GM's reduced need for new vehicles.
The plant is known for making about 1 million engines annually. But last year, due to smaller orders from GM, the total was about 750,000. Finch said the output this year could be in the range of 500,000 engines, although Finch stressed that was a "ballpark figure" and that the outlook could change depending on GM's needs in future months.
Omotoso said he also expects the size of the Tonawanda site's work force to continue to shrink. That process has unfolding for a number of years, through attrition, buyouts and retirements.
The plant has 201 salaried workers. That could decline as GM cuts 3,400 jobs from its U.S. salaried work force, though it has not specified where the reductions will occur.
The site has 1,139 hourly workers represented by the UAW. About 415 of them are on indefinite layoff, due to declines in production volume. And GM is trying to persuade more of its U.S. hourly workers to leave via a new separation offer.
The Tonawanda plant has helped protect its future by securing new product lines as older engine lines were phased out.
In 2007, it appeared poised to bring in an additional two engine lines. But GM ended up canceling one of the projects, a V-8 engine, and has delayed the start of the other, a "Duramax" 4.5-liter engine line that was supposed to be launched this year. GM says the Tonawanda plant is still its choice to make that engine.
Despite those setbacks, Finch said he feels good about what the Tonawanda site is producing. The L-850, for instance, is a four-cylinder engine that fits well with GM's emphasis on fuel-efficient vehicles, he said.
And even a smaller-volume product such as its L18 engine has applications that reach into the commercial and marine sectors and has a reputation for durability, Finch said.
Omotoso said engine plants considered vulnerable are the kind that make only one type of engine, like a V-8 truck engine. Tonawanda, in contrast, has different engine families that serve different markets, he said.
"Having that variety of products is a plus for Tonawanda," Omotoso said.