GM Will Close Its Oldest Auto Plant in Mexico

Mexico’s oldest automotive plant will be the first casualty of the stricter industrial pollution guidelines for this smog-choked city that were enacted earlier this week.

General Motors Corp. announced Friday that the company will relocate its 56-year-old truck plant, which employs 1,500 workers, within five years--three years longer than officials here said they would give polluters.

Stricter pollution guidelines were the last straw for the old factory, whose antiquated systems and militant union are marked contrasts with newer GM plants near the U.S. border.

“This is the opportunity to construct a state-of-the-art plant to replace the existing one,” company executives said in a written statement. GM estimated the cost of a new plant at $400 million and said its location will be revealed in a few days.

“General Motors of Mexico recognizes its obligation to comply with the environmental regulations for the Mexico Valley established March 24 and at the same time to find an economic balance that satisfies customers, maintains product quality and optimizes labor relations,” the company said.

Several other factories are expected to announce closures as the new guidelines are implemented. Environmental activists say that industrialists had wanted to announce the closures when the guidelines were signed Tuesday, but government officials did not want to be seen as responsible for the loss of so many jobs.

The GM plant exemplifies the kind of old factories that environmentalists say companies are likely to close rather than modify to meet anti-pollution standards.

Built on a 37-acre site in what was an undeveloped area in 1936, the plant is a relic of the era when auto makers assembled cars and trucks in labor-intensive factories for the Mexican domestic market. In the intervening years, more factories, businesses and homes have been built nearby.

GM--like other car manufacturers--has built larger, more sophisticated factories in smaller cities nearer the U.S. border to serve the North American market. The move to smaller cities also provided auto makers with a less militant labor force.

Meanwhile, the growth of this mile-high city into a metropolis of 22 million people has created severe smog problems that authorities have tried to resolve with increasingly tough environmental regulations.

The GM plant, along with a nearby Chrysler factory and a Ford plant in a northern suburb, were among 220 industries targeted by environmental authorities for emission control.

GM officials were told that the plant’s paint chambers were its main offender. Space limitations made installation of modern paint facilities impossible, according to the company statement, so GM decided to move the entire plant.

GM guaranteed that workers will keep their jobs for three years and that those entitled under Mexican law to early retirement or severance pay will receive it.

“Those interested in being hired at the new plant will be considered based on the employment guidelines that are determined,” according to the company statement.

Company headquarters will remain in Mexico City, and the engineering department will move to the 30-year-old Toluca engine plant, 40 miles north of here.