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GM Begins Rebirth With Engine Plant in Tonawanda

$425 million investment, 470 proposed new jobs affirm future for production

By George Pyle and Phil Fairbanks

February, 19 2010

 General Motors, on its deathbed just a year ago, announced a half-billion-dollar investment in its U.S. facilities Thursday, with almost all of the money going to its engine plant in the Town of Tonawanda.

The $425 million investment is expected to create 470 jobs at the plant and ensure its future as the producer of GM's next-generation engine — the fuel-efficient, four-cylinder Ecotec.

The automaker's plans for the sprawling plant on River Road also provide a glimpse into the new GM work force, a far cry from the assembly line workers who made $30 an hour. New employees will make about half that much.

"This is the day we've been waiting for," said plant manager Steve Finch. "If anybody thinks that manufacturing is dead in America, they need to come here. It's alive right here in Tonawanda."

By the time GM completes its investment in Tonawanda, the plant will have the capacity to build 370,000 Ecotec engines a year.

"It's great news for the community," said Tom Carberry, a 37-year employee at the Tonawanda plant.

Carberry knows that attracting new engine lines is essential to an auto plant's staying in business. He also knows that the workers in Tonawanda, fresh from the loss of two engine lines last year, were eager to prove themselves.

"Even when we got the bad news last year, we felt it could have been worse," Carberry said. "Leaving us open said [GM] still believed in us, and there was a future here. That kept the hope alive in everybody."

Many of the 650 workers who still have jobs at the GM Powertrain Plant gathered on the shop floor Thursday morning to hear themselves praised as the kind of work force that persuaded the automaker to not only keep the plant open, but also to invest in it.

The new General Motors, which received an infusion of federal bailout cash last year and emerged from a 40-day bankruptcy in July, announced a total of $494 million in upgrades at three facilities, with 85 percent of that funding going to the Tonawanda plant.

Less certain is how many of the new jobs being created in Tonawanda will be filled by new workers. The Tonawanda plant alone has about 300 employees who are on indefinite layoff and will get first crack at the new positions.

United Auto Workers members who have been furloughed from other GM facilities also will have a place in line as new jobs are created, with hiring and training to start sometime next year.

Is this a sign of General Motors' recovery?

"You hope it is, and not just for the American auto industry, but for all U.S. manufacturers," said Larry Kraska, a 29-year plant employee currently on layoff. "We've got to get back to building things. We've got to get back to what other countries are doing — building things to build an economy."

The positive working relationship between management and labor at the Tonawanda plant was cited Thursday as one of the reasons that it won the new engine line.

"The effective and productive labor-management pact that's been in place for years is the reason why, in such a tumultuous period, the Tonawanda plant has fared as well as any other plant in the country," said Andrew J. Rudnick, president of the Buffalo Niagara Partnership.

Rudnick said a big part of that success is a competitive wage scale, a key aspect of the new GM.

Others point to the global car market and the pressure it put on individual auto plants to win such projects. All this at a time when car companies are looking for ways to increase productivity.

One of Tonawanda's answers was a wage structure that pays new employees about half what their predecessors made.

A GM spokeswoman said the exact nature of the new jobs and their pay rates have not yet been determined.

The Tonawanda plant currently employs 522 hourly and 129 salaried workers. At its peak in 1979, the plant employed 6,000, and as recently as 1990, the number was 4,300.

At Thursday's announcement, company executives and UAW officials appeared in pairs — one management, one union — to praise the quality of work in Tonawanda and celebrate what they called a new day for not only GM and Tonawanda, but for American manufacturing in general.

"It's about time," said UAW shop chairman Bob Coleman, standing shoulder to shoulder with GM manager Finch. "Thank you to GM for giving us the opportunity to make this engine."

"And I want to thank you all," Coleman said to the assembled workers, "for the work that you have done to prove that Tonawanda is the place to make engines."

At times, Thursday's news conference resembled a labor-management love fest.

"This isn't the greatest engine plant in the United States," said Joe Ashton, a UAW Region 9 manager. "This is the greatest engine plant in the world."

Ashton said the plant's investment benefits not just workers, but the larger community as well. He said each new plant job means an additional five jobs in the local economy.

Gov. David A. Paterson also saluted the plant, its management and labor force, as he announced $7 million in state grants to help pay for GM's improvements.

"We are going to be leaders in the global economy," Paterson told the crowd. "We can compete with anybody around the world."

GM may also seek help from the Erie County Industrial Development Agency, although agency officials indicated that it is not yet clear what type of assistance might be sought.

In the past, the automaker has received property tax breaks from the county, town and local school district.

Sen. Charles E. Schumer, D-N.Y., said GM's expansion is proof that the federal government was right to bail out the then-bankrupt automaker and ignore those who suggested America's days as a manufacturing leader were over.

"They were wrong," Schumer said, "and we were right to rescue GM. We knew that here in Tonawanda was the best labor force in the world."

After the speeches, GM and UAW officials unveiled a model of the new Ecotec engine that will be made at the plant. Among those crowding in for a closer look was plant worker Rick Voltz.

"It was good to finally hear it," Voltz said, noting the recent rumors of new work headed Tonawanda's way. "[But] until you finally hear it, you just don't know."

Voltz said he was confident that the automaker would not regret its decision.

"We're as competent as anyone in the world," he said. "All we need is a chance."

News Staff Reporter Donn Esmonde contributed to this report.

gpyle@buffnews.com; pfairbanks@buffnews.com