DETROIT, Nov 22: Ending months of speculation, General Motors Corp said on Friday it will stop building cars at its historic Buick city assembly centre in Flint, Michigan in the third quarter of 1999, affecting about 2,900 hourly workers.

But GM moved to soften the blow to Michigan's fourth-largest city by saying it expects to build a new engine plant in the area next spring with an investment that could exceed $500 million.

Buick City, one of GM's oldest plants, makes the big Buick LeSabre and Pontiac Bonneville front-drive cars. GM had previously said the plant did not have a product assigned to it beyond the 1999 model year. But it had not put a final date on the production halt.

Workers were told of the action Friday afternoon between the first and second shifts, before it was announced publicly. GM expects about one-third of the affected workers to be eligible for retirement by June 1999.

Remaining employees will be offered jobs at other GM facilities, and be eligible for job security benefits. GM said the decision was based on market studies that showed it can meet its future full-size car needs with two plants. Company officials would not disclose where those plants are.

President of GM's North American operations, Richard Wagoner also said GM made its announcement on Friday to ``end speculation that a future product will be assigned to Buick City.'' United Auto workers union officials had said they were holding discussions with GM to bring a new product to the Flint area.

On Friday, top UAW leaders issued a statement blasting GM's move, noting the nation's No 1 automaker is building eight plants overseas.

``This action is one more example of the `America-last' strategy that's driving the biggest corporations in the US to cut the guts out of the economic future of today's workers and their children,'' UAW president Stephen Yokich said.

``Closing this facility is a betrayal of GM's workforce, of the community and of the country, especially in light of GM's huge profits,'' Yokich said.

GM spokeswoman Christine D'Angela would not say what engine would be built by the plant, which still requires board approval. It is expected to start production in 2000 for the 2001 model year. The facility is expected to employ several hundred workers who are being displaced by the previously announced closure of the V8 engine plant in another part of Flint.

GM spokesman Mark Tanner said the actions in Flint will account for $450 million of the previously disclosed $2 billion to $3 billion charge the company expects to take. About $350 million will come from job reductions at Buick city assembly. Another $100 million will be associated with reductions at the Buick city complex's V6 power train unit. The Buick city assembly plant is part of the company's massive Buick city complex, which also includes power train, components and facilities operations. About 9,500 people currently work at the complex.

GM has 35,000 people in the entire Flint area. Although GM has pledged total investments of $1.5 billion to the region, thousands of GM jobs have been lost in recent years. The hard times experienced by Flint were chronicled in Michael Moore's satirical 1990 film, ``Roger and Me,'' in which the filmmaker relentlessly pursued then-GM chairman Roger Smith.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.