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Published: Tuesday, 2/28/2006

GM confirms $500M project; Toledo's Powertrain beats out 2 plants for makeover

BY JULIE M. McKINNON
BLADE BUSINESS WRITER

The expansion, including a 400,000-square-foot addition to the Alexis Road factory, will enable Toledo Powertrain to build 3,000 better-performing, rear-wheel-drive transmissions a day for the 2008 GMC Yukon Denali and Yukon Denali XL.

It also will help preserve jobs at the 3,500-employee factory as the automaker gradually replaces four-speed transmissions made there with six-speed versions that improve fuel efficiency and acceleration.

"I'm sure if this works out, there's more work coming to Toledo," Oscar Bunch, president of United Auto Workers Local 14, told a jubilant crowd gathered on the plant floor.

GM estimates it will need more than 3 million of six-speed transmissions by 2010, including front, rear, four, and all-wheel-drive variants, and will build only a third of that by 2008 with the Toledo factory's help.

Only one other factory at the nation's largest automaker produces six-speed transmissions, a Ypsilanti, Mich., plant that, along with a Mexican plant, failed to win the new investment.

The Michigan plant, from $450 million previously invested in it, makes transmissions for the 2006 Chevrolet Corvette, Cadillac STS-V, and Cadillac XLR-V.

John Buttermore, GM Powertrain vice president of manufacturing, told The Blade a combination of factors helped Toledo win the work.

Among them, he said, was the ability of union and management to work together at the plant, which has received the top productivity rating among North American plants for five of the last six years in a well-respected consultant's study.

The executive declined to comment, however, on whether Toledo Powertrain could be awarded more work for other vehicles.

"We'll cross over that bridge when we come to it," Mr. Buttermore said.

The news was especially sweet as GM is among American automakers making huge cutbacks to stem losses.

The company is planning to slash 30,000 jobs over the next two years and close 12 of its North American plants.

Construction on the $100 million Toledo addition is to begin in July, and part of the existing 1.8-million square foot factory will be renovated as well.

About 900 employees will work on the new transmissions, in teams of four to six people.

"This is a foundation piece, a very critical foundation piece," said plant manager Joe Choate.

On top of the $500 million being spent in Toledo, GM will spend $100 million for tooling, containers, and other investments at facilities that support the factory, the automaker said.

Local and state officials assembled an incentive package valued at $75 million over 15 years to help lure the project. The state's portion, which officials previously refused to divulge, is valued at $32.7 million in tax credits, grants, services, and a low-interest loan.

Toledo Powertrain makes all of GM's four-speed, rear-wheel-drive automatic transmissions for vehicles such as the Chevrolet Silverado and Chevrolet Tahoe.

It currently produces 6,400 a day.

Contact Julie M. McKinnon at:

jmckinnon@theblade.com

or 419-724-6087.



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