MAHONING VALLEY
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Lordstown’s future hinges on March announcement BY SEAN T. POSEY
GM Lordstown’s closure would be only the latest chapter in a very difficult two decades for the Mahoning Valley and Trumbull County in particular.
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n September 1964 workers descended on a cornfield in rural Lordstown to break ground on what would become one of the most modern assembly plants operated by General Motors. In April 1966 the plant’s first vehicle, a Chevrolet Impala sports sedan, rolled off the assembly line at GM Lordstown. If nothing else changes, that 52-year history will come to an end in March when production is halted on the Chevrolet Cruze. GM announced in November that it plans on eliminating six car models and nearly 15,000 workers. Five plants in North America – Lordstown, DetroitHamtramck and Warren Transmission in Michigan, Oshawa Assembly in Ontario and Baltimore Operations in Maryland will be idled. If Lordstown isn’t allotted another vehicle, the impacts of a permanent shutdown will be widely felt, experts say. As late as 2016, the plant employed 4,500 workers on three shifts. GM halted the third shift in November 2016 and the second shift in June 2018. Dr. Tod Porter, chairman of YSU’s economic department, estimates that for every manufacturing job lost, three other jobs are also lost. “Three is probably a reasonable multiplier effect,” he says. “The way the multiplier effect works is you have people who are laid off, they spend less money and that ends up generating less revenue for local businesses and decreases employment. That practice takes time.” The impact of the loss of the first shift has most likely already worked its way through the local economy, Porter says. However, the loss of the second shift has likely not been fully felt. “When you consider jobs that were cut in June, you’re looking at somewhere in the neighborhood of 8,000 to 9,000 jobs that could be lost,” he explains. Closing GM Lordstown could increase local unemployment numbers by 4 percent to 5 percent, Porter estimates. Local suppliers and businesses that service the plant are particularly vulnerable. Source Providers, Inc., a warehouse and logistics firm in Austintown that provides services to Lordstown, employed nearly 600 workers only a few years ago. Their workforce
ELECTRONIC IMAGE COURTESY OF GENERAL MOTORS
Workers at GM Lordstown celebrate a milestone in 2014 – 1 million Cruzes built
had been reduced to 180 after the elimination of two shifts at GM Lordstown. The subsidiary of Comprehensive Logistics Co. announced it would close March 8 in response to the Lordstown decision. Magna’s Lordstown Seating Systems of Warren, maker of seats for the Cruze, reported in April 2018 that it would lay off 83 employees. Magna International Inc., a Canadian automotive supplier, announced on Dec. 29 it would lay off a further 120 employees. In a press release, the company stated that “layoffs should be considered permanent” if the Lordstown plant isn’t al-
located another product. The Village of Lordstown expects to lose around a million dollars in income tax revenues annually when the plant is idled in March. The city of Warren expects to lose approximately $161,000 or less in income tax revenue, according to the auditor’s office. The biggest economic impact for the city of Warren will come from the loss of water revenue from the GM Lordstown plant, says Franco Lucarelli, director of the water department. “GM’s water bill for 2017 was around $500,000,” he says. “Their bill for 2018 is
ELECTRONIC IMAGE COURTESY OF GENERAL MOTORS
The GM Lordstown complex in an undated photo
going to be a little higher, probably between $550,000 and $600,000.” When all three shifts last operated in 2016, the plant’s bill totaled around $700,000. “Those types of consumers are few and far between,” Lucarelli says. “No other industrial consumer comes close to using that amount of water.” There’s a possibility that the Lordstown Energy Center, which began commercial operations in October, could make up for some lost revenue, Lucarelli says. Discussions are ongoing to determine the viability of that prospect. “Right now it’s a little premature, because we’ve just started the discussions.” GM Lordstown’s closure would be only the latest chapter in a very difficult two decades for the Mahoning Valley and Trumbull County in particular. There’s essentially been no employment growth in the area since 1998, according to Dr. Porter. According to reporting by Your Voice Ohio, a collaboration of news organizations from across the state, Trumbull County has lost nearly 40 percent of its payroll or $1.7 billion since 2000. In particular, the Great Recession hammered the county and the YoungstownWarren-Boardman metro area, especially the first three years after the recession began, says Dr. John Russo, retired director of YSU’s Center for Working-Class Studies. “The 22,000 jobs lost in that three-year period is more than any three-year period during the steel crisis.” Russo says it’s possible that GM might introduce a new product to the Lordstown plant, but a decision wouldn’t be likely until after the 2019 labor negotiations with the United Auto Workers. “They won’t do those investments until they’ve negotiated new contracts, so you can expect people who are working in these plants to see another tier of wages – in order to get a plant back.” Under this model, pension cuts for retirees are also possible, he says. Referring to the upcoming 2019 contract talks with the UAW, GM Spokesman Patrick Morrissey says, “The future of the SEE LORDSTOWN, PAGE 8
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