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Plastomer Corp., a major player in acoustical foam products, is launching a $4 million plant expansion that will help the firm reduce costs in the crowded automotive and appliance industries.

``The bottom line is that we're doing this so we can continue performing a competitive and viable service for customers,'' said Executive Vice President David Baughman of the Livonia, Mich., company. ``It will reflect in lower costs for bids we're placing now for work two to three years out.''

The foam producer, which makes polyurethane gaskets, seals and acoustical die-cut products, is installing a new foam slab-stock line, two new foam-bun splitting machines, three die-cutting machines and a new laminator at its existing, 250,000-square-foot plant. The work is scheduled for completion in 18 months.

The new machinery will allow the die cutter to produce higher-tonnage foam materials, which Baughman said will reduce scrap materials and cut end-process inventory by 30 percent. By producing larger materials, the company also can increase capacity without the need to add square footage to the plant.

Plastomer, which recorded sales of $40 million last year, supplies adhesive-backed foam gaskets, seals and acoustical devices to automakers and more than 200 Tier 1 and Tier 2 suppliers. The products are used as sound-deadeners for interior door panels, headliners, seating and other parts of a vehicle frame.

The family-owned business also has established a niche in acoustical foam devices for heating and air-conditioning units and other appliances.

Plastomer's capital-expenditure program was delayed slightly until negotiations were completed with the United Auto Workers on a new contract for production workers. Negotiations, which Baughman described as typically grueling but fair, were completed in December with the signing of a three-year deal in effect until May 2000.

Contract details were not announced. The firm employs 420.

The company also announced it has entered into a strategic alliance with Stanton Industries of London. The British foam-product manufacturer will share manufacturing concepts and technology with Plastomer, Baughman said.