GM to Close Engine Plant; 2,000 Jobs to Be Affected

In its first major U.S. plant closing announcement in nearly two years, General Motors said Wednesday that its central foundry division will idle an engine-parts casting plant in Pontiac, Mich., by 1987, affecting the jobs of 2,000 GM workers.

GM blamed the planned closing of its 900,000-square-foot Pontiac facility, which supplies engine heads and blocks to GM engine-assembly plants, on slumping demand for iron automotive castings and on the need to eliminate excess production capacity.

Central foundry division officials said the closing will allow them to reduce the division’s unused casting capacity by consolidating production at its remaining plants in Defiance, Ohio, and Saginaw, Mich.

Production at the Pontiac plant will continue at normal levels for the rest of 1985 but will be slowly phased out from 1986 until the plant’s shutdown in July, 1987.

The Pontiac plant’s 1,800 hourly and 200 salaried workers will be laid off at least temporarily after the plant closes, but GM said many of the plant’s workers should be able to transfer to the Saginaw and Defiance plants or to other GM facilities in the Pontiac area.

Some are also likely to be retrained for new jobs through GM’s new “job bank” for laid-off workers. Under GM’s 1984 contract with the United Auto Workers, a $1-billion fund was established to provide retraining and income security for workers whose jobs are abolished.

Although domestic car sales are still relatively strong, central foundry division officials said demand for iron castings has declined because of the trend toward smaller engines and front-wheel-drive power trains, which use fewer cast-iron parts than do older rear-drive transmissions.

“Clearly, we will need less iron-casting production to meet GM’s needs in the foreseeable future,” said Thomas Wiltse, the central foundry division’s general manager.

GM added that it is still studying whether it can use the Pontiac facility, which is in the middle of a larger manufacturing and assembly complex, to make other parts in the future.

Wednesday’s action was the first plant closing announcement by GM since June, 1983, when it said it would close another central foundry division plant in Tonawanda, N.Y.

Production from the Tonawanda plant also has been transferred to the central foundry division’s Saginaw plant, which is in the midst of a modernization and expansion program.