General Motors Corp. announced a $206 million expansion yesterday of its Allison Transmission division plant in White Marsh that will double the size and eventual output of the plant, which is still under construction.
The expansion will add 390 jobs, bringing total employment at the Allison plant to 810 by late 2002. But they will not be new jobs. Allison spokesman Nick Crews said that virtually all of the workers will be shifted from GM's van assembly plant in Southeast Baltimore, where production is being cut back.
The expansion will bring GM's total investment in the Allison site to $423 million. State officials said the automaker will receive additional financial incentives, but declined to disclose specifics of the new package until it is submitted to state legislators.
GM's announcement comes as the company prepares to end the second shift at its van assembly plant on Broening Highway, resulting in the layoff of 600 workers.
The big plant's last two-shift operation will be tomorrow night, when the 65-year-old plant closes for model changeover. When production resumes July 17, there will be only one shift.
GM, union, industry and state officials insist that the elimination of the second shift and gradual transfer of 810 workers to White Marsh do not necessarily mean that the van assembly plant will be phased out.
"Absolutely not," said Daniel Flores, a spokesman for GM's Truck Group, which has jurisdiction over the Baltimore plant. "What happens to the Baltimore plant beyond the third quarter of 2003 has yet to be determined."
GM has said van production will continue until that date. Beyond then, market demand for the van will determine the plant's future, Flores said.
Richard C. Mike Lewin, secretary of the state Department of Business and Economic Development, said officials continue to hold talks with GM about the possibility of producing a new vehicle here. That would require retooling the existing assembly plant or building a new facility.
"The expansion at White Marsh is not a substitute for a new product at Baltimore," said Sen. Barbara A. Mikulski. "We will continue to be aggressive in our efforts to get a new product line," the Maryland Democrat said.
Lewin also said there is a possibility that Allison will expand its Baltimore County plant again in the future. He said it is also possible that GM will locate another plant on the property, perhaps an engine plant.
The project announced yesterday will double both the size of the Allison plant, to 800,00 square feet, and its output, to an eventual 280,000 transmissions a year.
Construction of the first phase, announced in May 1999, is to be completed in September or October, with the first transmissions scheduled to roll off the assembly line in January.
The expansion is to be completed in the second half of 2002, according to Crews.
Lewin said the state had granted GM additional incentives that include workforce training and Sunny Day Fund grants. Lewin said the amount of the incentives would not be disclosed until the state took the package to the General Assembly.
The state and Baltimore County used a $10 million incentive package to originally lure Allison to a 65-acre site with easy access to Interstate 95. It included a worker training program, grants, loans, tax breaks and construction of a state-owned electric power plant that reduces the plant's electric bill.
Dan Hancock, president of Allison Transmission, attributed the latest expansion to the continued strong worldwide demand for the company's 1000 Series truck transmissions.
"The Baltimore area offers a well-trained workforce, attractive state and local economic development packages and other benefits, all of which have helped to make this expansion possible," said Hancock. Charles R. Alfred, president of UAW Local 239, which represents the plant's hourly workers, welcomed the Allison expansion, calling it "a major development for the [GM] workers."
But Alfred still clings to the hope that GM will continue its long history of making cars and trucks in Baltimore. "I'm optimistic," he said. "When Governor Glendening met with GM in Annapolis in May, the GM people didn't say no to the governor's suggestion that the assembly plant remain open. They said Maryland will be considered for any new product that comes along."
"I would be upset if GM said that Allison is here but the [assembly] plant is gone," Alfred added.