Gm Makes New Investment in New York Plant

by : Iver Penn

General Motors Corp. has announced on Thursday that it was planning to invest in its engine plant in Tonawanda, New York. The automaker however, did not release further details.

Union representatives and state and local officials have been trying to secure production of GM's 4.5 liter diesel engine for some pickup trucks and sport utility vehicles for the 2010 model year.

Senator Hillary Rodham Clinton has written to GM Chief Executive Rick Wagoner supporting efforts for production of the engine at the upstate New York plant. In the letter the Senator praised the talent of local workers and said the new diesel line would represent a significant investment in the local economy.

It can be remembered that GM has earlier announced that the company would be relocating production and jobs out of New York State. The resulting layoffs would which was slated to begin immediately and end in late 2008 was set to affect an estimated 500 local residents.

Rumors of the plant's closure have prompted Senator Clinton and Congressman John McHugh to send a letter to General Motors CEO Wagoner urging him not to shutdown the plant and inviting him to communicate with officials about possible ways to keep the plant in Massena. Senator Clinton's office has since been in contact with local, state and community officials to offer her help.

In January, GM said it would invest $300 million in the plant to make new V-8 engines for its luxury vehicles, slated for production in 2009. That announcement brought GM's total investment in the plant to $1.5 billion over the last decade.

General Motors is also now expected to announce the assignment of a new diesel engine line to the Town of Tonawanda's Powertrain plant this Friday. The factory issued a bid for the new line, but several other plants showed strong interest as well.

In May, Erie County officials approved a $350,000 sales tax break to clinch the GM investment in the plant. Recent amendments to the payment-in-lieu-of-taxes agreement between the Erie County Industrial Development Agency and America's largest domestic automaker's plant on River Road resulted in an additional reduction of nearly $8 million in payments over a 25-year period.

According to GM Spokesperson Mary Ann Brown, those savings could play a key role in bringing the new line to Tonawanda, since government cooperation is one of the key factors looked at in making the final decision.

New York Gov. Elliot Spitzer, Erie County Executive Joel Giambra and Town of Tonawanda Supervisor Ron Moline will join representatives from GM, the United Auto Workers local union and the Empire State Development Corp. at the announcement, scheduled at the plant for 2 p.m.

If the plant is awarded the new 4.5-liter diesel engine line, production would begin in 2009 and the engines would appear in certain 2010 models of trucks and SUVs.

The plant employs 1,860 people and currently makes engines (as well as parts like ) for several GM vehicles, including the Chevrolet Cobalt, HHR, Malibu, Impala and the Saturn Ion.