What’s hiding behind the curtain? That’s the multimillion-dollar question at General Motors’ Tonawanda Engine Plant, which is on a winning streak when it comes to major business developments.
The plant announced last week it would be producing a new type of fuel-efficient V-8 engine for the 2019 Chevrolet Silverado pickup truck. That’s a win for 635 employees there whose jobs will be secured by the $33 million project.
The move is part of GM’s announcement in 2016 that it was investing $296 million in the Tonawanda plant, which has about 1,700 employees in all.
But wait – as they say on infomercials – there’s more.
A tarp is covering a 600-foot-long section of the engine plant, where other projects are in development as part of the GM investment.
Plant Director Ram Ramanujam isn’t giving any clues, but the millions of dollars involved mean it will be a very big deal. The company says it will make two more product announcements next year, so we will need to stay tuned for the big “reveals.”
What made this week’s news exciting for Tonawanda and our region is the evidence of forward thinking by GM. The new V-8 engine, production of which began last month at the Tonawanda plant, features an innovative design to improve fuel economy. GM calls it the Dynamic Fuel Management system and it allows the engine to run in 17 different cylinder patterns – from eight cylinders all the way down to one.
The engine will be used in the 2019 GMC Sierra as well as the Silverado, the pickup that is GM’s No. 2-selling vehicle overall.
Fuel economy is a concern as climbing gasoline prices – averaging close to $3 a gallon in this area – make filling up the tank a painful undertaking these days. At some point will consumers’ love of pickups and SUVs slacken, as pump prices force them to consider smaller cars?
Ramanujam said last week that the engine plant’s other lines, which include smaller engines for passenger cars and small SUVs, give it a hedge against rising gas prices.
Then there is the threat from electric cars and the disruption they will bring to the automotive market.
Bloomberg New Energy Finance this week published its 2018 Electric Vehicle Outlook. The report predicts electric vehicles will be less expensive than internal combustion engines in the next five years.
The report sees sales of electric vehicles increasing from a record 1.1 million worldwide last year to 11 million in 2025, and then surging to 30 million in 2030.
For now, however, electric vehicles account for less than 2 percent of worldwide auto sales.
“Right now, the focus is all on electric vehicles and autonomous driving systems,” Chuck Herr, shop chairman for Local 774 of the United Auto Workers union, told The News’ David Robinson this week. “We’re hoping this will keep the gas combustion engine in the market longer.”
Another concern in the industry is President Trump’s statement that he is considering imposing a tariff of up to 25 percent on imported cars. That does not figure to have much impact on the Tonawanda plant, according to a source at the company.
GM has come a long way since troubled times hit after the Great Recession in the last decade. It’s reassuring to know that the Tonawanda plant is part of a forward-thinking company’s future.