Defiance GM plant gets $115M upgrade

DEFIANCE - For the second time in three months, scores of workers at the General Motors Co. Defiance Powertrain Foundry left their stations to get a glimpse of an aluminum savior draped beneath a red cloth.

And when it was unveiled to the gathered employees and the media yesterday morning, the new small-block Chevy engine carried twice the cylinders - and almost twice the investment - of February's $59 million spirit-lifting announcement.

The automaker announced that it will spend $115 million to upgrade the Defiance Foundry to cast the new V8 engine block, saving up to 190 jobs over the next three years. The announcement was one component of an $890 million upgrade at five GM factories making next-generation, fuel-efficient engines.

"We talked in some of our past meetings about the transformation of Defiance and what we envision the future to be, and the future is before us," said plant manager Tom Gallagher.

The money will buy machinery and equipment to make small-block truck and car aluminum engine castings, GM said.

The new castings will be for 2013 vehicle models. The 1.9-million-square-foot plant also casts a variety of metal clutch, transmission, engine, and other drivetrain components.

The automaker said the money will preserve or create roughly 1,600 jobs at factories in Defiance; Tonawanda, N.Y.; St. Catherines, Ont.; Bay City, Mich., and Bedford, Ind.

GM said it would invest $400 million in Tonawanda, resulting in more than 710 jobs; $235 million in St. Catherines, resulting in 400 jobs; $111 million in Bedford, resulting in about 245 jobs, and $32 million in Bay City, resulting in more than 80 jobs.

The added work in Defiance helps secure the plant's future, Mr. Gallagher said. Since the automaker emerged from bankruptcy a year ago, it has announced more than $2.3 billion in investments in plants in North America, he said, "and I'm proud to say that two of those investments were here in Defiance."

Paul Murcko, GM chairman for UAW Local 211, which represents the plant's 1,177 hourly workers, and a longtime employee at the plant, said the new work was once thought out of reach for the 62-year-old plant.

"I remember back in the mid '90s when people told us that we couldn't pour aluminum in Defiance. You know what? With progressive leadership and a strong vision to bring work to Defiance, we've proved those skeptics wrong," Mr. Murcko said.

Mark Barbash of the Ohio Department of Development told about 100 workers gathered for the announcement at the plant yesterday: "It really is a testament to the faith that GM has in the work you do every day."

The investments include renovation of factories and installing flexible engine machinery and assembly equipment.

GM, the largest U.S. automaker, is boosting its spending on more fuel-efficient engines as governments push for reduced emissions and as rising fuel prices spur consumer demand for vehicles with better mileage.

A significant portion of reaching new mileage requirements is reducing weight, something that can be accomplished by switching from iron to aluminum components.

"These latest investments show our commitment to improving fuel economy for buyers of every GM car, truck, and crossover," said Mark Reuss, president of GM North America.

The new engine will rely exclusively on aluminum engine blocks, which are lighter and help fuel efficiency, the company said.

They will be used in performance versions of vehicles such as the Chevy Camaro sports car and Silverado pickup.

"A year ago, during the bankruptcy, we'd come to work day-to-day not knowing if this place was even going to be here or if we even had a job," said UAW Local 211 President Dwight Chatham. "The people in Washington took it upon themselves to support the auto industry. If we hadn't gotten that support, I don't know if we'd even be here today."

Bill Romes, a 35-year employee at GM's Defiance Foundry who plans to retire soon, said yesterday's announcement means more than just personal job security.

"There's a lot of positive things that will come out of this, and I'm thankful for that. I'm thankful for the generation behind me, that they'll hopefully have a place to work," he said.

GM announced in February a $59 million investment in its Defiance factory which meant the recall of the remaining 57 workers on layoff and the hiring of another 20 workers.

The project was part of $494 million the automaker was putting into its next generation, fuel-efficient Ecotec engine, including a $435 million investment to an engine plant in Tonawanda, N.Y.

That money was to pay for machinery and tooling to support annual production of 188,000 precision sand-cast blocks for the engine, GM said. The Defiance foundry also was awarded $518,232 this year from a state energy program that was funded by the 2009 federal stimulus package.

The Ecotec engine is slated to be used in the Chevrolet Cobalt and Chevrolet Cruze models to be built in GM's plant in Lordstown, Ohio. The Cobalt is in production, and the Cruze is slated to begin production this year.

The Defiance foundry also is among the plants that will have a hand in producing the upcoming Chevy Volt, a new extended-range electric vehicle.

Defiance Mayor Bob Armstrong said GM's investment helps secure his city's immediate future, given that the tax revenue generated by the plant represents "15 or 20 percent" of the city's general fund budget.

"It's a large investment out here, and that's a good investment for our community," he said.

"Just a year ago, they were announcing bankruptcy, and you can imagine what a fear that brought to the city of Defiance. Now, with the added money they've put into their business, we feel secure in our budget, too."

Contact Larry P. Vellequette at:

lvellequette@theblade.com

or 419-724-6091.