General Motors Plant in Van Nuys to Close : Auto industry: Southland’s last major car factory will shut down next summer. Up to 2,600 will lose jobs.

General Motors Corp., faced with underused factories and a sluggish market, said Friday it plans to close its Van Nuys assembly plant--the last major car factory in Southern California--next summer.

The closing will mean the loss of up to 2,600 high-paying jobs at the sprawling Van Nuys plant at a time when Southern California has already lost thousands of aerospace and other manufacturing jobs to lower-wage factories abroad and other regions of the United States.

Auto-component suppliers, stores and other businesses that serve the Van Nuys facility and its work force may also feel the ripple effect of the factory shutdown.

Rep. Howard L. Berman (D-Panorama City) called the closure “devastating news, not only to its employees but to the community at large.”

United Auto Workers officials were outraged. The shutdown is “a total betrayal,” said Bruce Lee, the UAW’s western regional director. He said he and other UAW officials “felt we had firm commitments that the plant would not be closed based on the work that was done” to improve labor-management relations.

“It’s very unfortunate. This is a good plant and a good work force,” Edmond J. Dilworth Jr., group director of public relations for GM’s Chevrolet-Pontiac-Canada division, told a news conference at the plant. “But we weren’t able to find a product for the plant.”

The 100-acre plant, GM’s only source for its Chevrolet Camaro and Pontiac Firebird sports cars, will cease operating in August, 1992, after it completes production of the vehicles’ 1992 models, GM said. The plant has built 6.3 million vehicles.

The announcement was not a complete surprise. GM had announced in 1989 that it planned to move production of the Camaro and Firebird to its plant in Ste. Therese, Canada, after 1992.

The question became whether GM, the largest U.S. auto maker, would find another vehicle for Van Nuys to build. Local leaders of the UAW held out hope that Van Nuys might become a “flex” plant--capable of building different cars on short notice--or build GM’s proposed electric car. But in the end, the answer was no.

The decision clouded the future of the 2,600 people who work at the plant, which has already laid off an additional 900 during the past year. GM said it would spend the next year trying to relocate and retrain them for other employment, but more layoffs are expected.

The plant’s workers have a safety net, however. The current three-year contract between GM and the UAW, ratified in 1990, provides for workers to receive up to 95% of their take-home pay for at least 36 weeks after they are laid off because of production cutbacks. The money largely comes from state unemployment benefits and company payments.

The demise of the Van Nuys plant means that only one auto assembly plant will remain in California. A plant in Fremont, a joint venture of GM and Toyota Motor Co. named New United Motor Manufacturing Inc., builds GM’s Geo Prizm and the Toyota Corolla, both Japanese-designed models.

The Fremont plant had once been closed by GM, along with its South Gate plant, in 1982. Ford Motor Co. once had assembly plants in Pico Rivera and Milpitas, but they were closed in 1980 and 1983, respectively.

The slow but steady decline of the California auto industry has been fueled by the efforts of auto makers to centralize factories closer to the Midwest, where the companies’ parts suppliers are nearby and labor costs are cheaper. The Van Nuys production workers earn an average of $16 to $17 an hour.

“It costs a great deal to employ people in Southern California because of the cost of living,” said Christopher Cedergren, senior vice president of AutoPacific Group Inc., an auto research firm in Santa Ana. He also said GM faced the prospect of having to invest perhaps $300 million to modernize the Van Nuys plant.

The factory also suffered because of slumping sales of the Camaro and Firebird, which have been built there since 1977. Owing in large part to the nearly unchanged design of the cars over the past decade, Camaro and Firebird sales have steadily declined since their peak year in 1978, when their combined sales were about 477,000 cars.

GM was also under severe pressure to cut costs and pare its excessive production capacity to match the lower demand for its vehicles. Indeed, GM also announced Friday that it plans to close a van assembly plant in Canada. On a single day last October, it announced the closure of four other U.S. plants. Van Nuys’ production was cut last January to one shift from two, resulting in the indefinite layoff of about 900 workers.

GM’s share of the U.S. auto market is about 35%, down from about 45% a decade ago. In 1990, GM lost nearly $2 billion, which included the cost of plant plant closings. It lost an additional $1.2 billion from operations during the first three months of this year.

The Van Nuys plant was opened in 1947, building Chevrolet trucks and shells for the Fisher Body division of GM. Initially, the plant employed about 1,100 workers on a single shift. In 1955, a second shift was added, and the plant has been operating since with one or both shifts, depending on sales and inventories.

At various times, the Van Nuys plant churned out Chevrolet trucks, Corvairs, Monte Carlos, Chevelles and Novas as well as Oldsmobile Omegas and Pontiac Venturas.

Although the plant has seen frequent management-labor disputes, local UAW leaders persuaded most Van Nuys workers in the late-1980s to embrace GM’s plan for a Japanese-style, “team concept” approach that gave workers more control over the production line. Some people believe that effort kept Van Nuys from being shuttered even earlier.

But GM never guaranteed that, by using the team concept, the plant would stay open.

Local 645’s recent leadership still believed the use of team concept was worth it, seeing cooperation with GM as a way to help ensure the plant’s survival. But some past local officials, and hundreds of union workers, objected to the plan. They asserted that it gave GM a way to wring concessions from the workers while doing little to prevent periodic layoffs or the plant’s eventual closure.

Former UAW shop chairman Peter Z. Beltran filed a suit with the National Labor Relations Board in 1987 in an effort to prevent GM from implementing the team concept. He lost, but earned a large following of workers opposed to the plan.

GM said it had not yet made a decision on what it will do with the plant after car production ends.

A Snapshot of the Plant

General Motors will close its auto assembly plant in Van Nuys in August, 1992. Here is a quick look at the workers and the plant.

The Workers

* The closing will put 2,600 hourly employees out of work. GM says it will try to find other jobs for the workers, but layoffs are expected.

* Production workers, who are paid an average of $16 to $17 an hour, will receive up to 95% of their after-tax pay for 36 weeks through a combination of state unemployment benefits and a GM-United Auto Workers contract.

The Plant

* The facility, which covers 100 acres, was built in 1947 and has produced 6.3 million vehicles.

* It currently manufactures Chevrolet Camaros and Pontiac Firebirds. During the first half of this year, Firebird sales were off 46.9% from last year and Camaro sales were down 39.5%.

* The plant has suffered from labor disputes and car quality problems, and was in need of a major investment to update it.

* GM suffers from overcapacity and, like Ford and Chrysler, the company has been concentrating its auto production in the Midwest.

What’s Left

* The closing will leave the New United Motor Manufacturing Inc. plant in Fremont, near Oakland, as the last auto assembly plant in California. NUMMI, jointly owned by Toyota and GM, employs about 3,000 workers.