GM Threatens to Close Van Nuys Plant : Company Urges U.S. to Drop Fuel Economy Standards for 1987

General Motors has told the federal government that it may shut down its long-threatened Van Nuys assembly plant within a year, along with at least two Midwest factories, if its requests to ease fuel economy standards are not met.

About 41,000 GM workers nationwide would be laid off over the next two years, GM said in a report submitted last week to the National Highway Traffic Safety Administration. In Van Nuys, 4,800 workers could be affected, although nearly half of them were furloughed indefinitely last month because of high inventory levels.

The GM report, submitted at the agency’s request, said the company would not be able to abide by standards for the 1987 model year without closing plants because lower gas prices have resulted in customers buying bigger, less fuel-efficient cars.

‘Not Going to Break Law’

Such closings “would mean eliminating some of our best-selling cars,” said Donald Postma, a GM spokesman in Detroit. “It’s not something we want to do. But we’re not going to break the law.”

GM and other car makers have made similar threats in the past to close plants if they are forced to comply with stiffer mileage requirements. However, GM had not previously issued a schedule for the closings of specific plants.

Under the law now, car makers must comply with a “corporate average fuel economy standard,” consisting of the average mile-per-gallon figure for all cars it sells. The standard for the 1986 model year, 26 miles per gallon, is to go to 27.5 miles per gallon for the 1987 model year.

A similar increase had been planned for 1986, but last October, the Reagan Administration approved a relaxation of the standards. The National Highway Traffic Safety Administration has said it could make a decision on changing the 1987 law as soon as next month.

Plant Threatened Before

The Van Nuys plant makes Chevrolet Camaro and Pontiac Firebird cars, which, according to federal tests, get 22 miles per gallon on the highway and 17 in city driving, based on standard equipment.

In the past year, GM has put a cloud over the future of the Van Nuys plant several times, including when it asked the South Coast Air Quality Management District to ease paint emissions standards. According to some United Auto Workers officials, GM intimated that it would close the plant if it did not receive certain labor concessions.

Joe B. Garcia, financial secretary for UAW Local 645 in Van Nuys, said the threatened closure over mileage requirements is just another instance of GM applying pressure, this time on the federal government, to get its way.

The company has not said whether it will keep the plant open past 1989, when current models will be phased out. In 1982, GM put the plant on what it called an “endangered list” because, it said, the plant’s location on the West Coast, far from Midwest suppliers, added hundreds of dollars in shipping costs to each car.

Several Scenarios

GM’s report to the federal government included a series of scenarios that it said would occur if the laws were not changed. Under best-case circumstances, GM said, it would stop work at the Van Nuys plant and at a sister plant in Norwood, Ohio, that makes the same model cars. GM said it would also close a plant in Detroit that makes full-size Cadillacs, Oldsmobiles and Chevrolets.

In the worst possible case, GM said, it would close eight plants and, in a ripple effect, cause the shutdown of hundreds of parts suppliers, resulting in a loss of more than 300,000 jobs nationwide.

Postma said that all the plants could be closed for up to two years. After that period, he said, a new line of GM cars should be able to bring the corporate average within scheduled federal standards.