Thursday, August 15, 2002
GM said it will spend $500 million upgrading its assembly plant and an additional $50 million on its fabricating plant.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
LORDSTOWN -- Four years after declaring General Motors' Lordstown plants his "No. 1 economic development priority," Ohio Gov. Bob Taft was set today to give the automaker's new, small-car project a multimillion-dollar shot-in-the-arm.
Taft was to join U.S. Sen. George Voinovich, other government dignitaries, GM officials and United Auto Workers leaders at a press conference celebrating GM's decision to spend more than $500 million to bring its new generation of small cars to Lordstown.
Plans are to complete plant renovations by 2004, in time to roll out the 2005 models that will replace the Chevrolet Cavalier and Pontiac Sunfire.
The governor's office said Taft would announce an incentive package for GM that includes $24.5 million in grants over four years, a $1.5 million low-interest loan for Trumbull County to help fund waterline improvements, as well as tax credits and tax abatements approved by local and county governments.
"He's extremely excited about the news," Taft's spokeswoman Mary Anne Sharkey said of the governor, recalling at least four visits he made to GM's headquarters over the past four years to push for bringing the new car model to Lordstown.
Voinovich and his special assistant for development, Michael Koren, also visited Detroit and met often with top GM officials to help win the new model for the Mahoning Valley. Voinovich was Ohio governor when GM first started talking about bringing the new product to Lordstown.
Employment levels
GM has promised to retain at least 2,600 jobs at the assembly plant for seven years after the newly refurbished facility starts making new, 2005 model cars, Sharkey said.
That plant employs 4,500 hourly and salaried workers, but GM officials have said that increased automation and better engineering will likely reduce the number needed for the new car model. The company has agreed, Sharkey said, to reduce employment through attrition, not layoffs.
The adjacent fabricating plant, which produces sheet metal parts for the assembly plant and several other plants, employs 2,590.
Word of GM's decision to bring the Cavalier and Sunfire replacement vehicles to Lordstown became public Tuesday evening when the company began announcing the plan to its employees. GM released more details Wednesday.
Plant investments
Dan Flores, a GM spokesman, said the company intends to spend $500 million at the assembly plant to reconfigure and retool the general assembly area, retool the plant's body shop and construct a state-of-the-art paint shop.
In addition, Flores said the automaker will spend $50 million at the fabricating plant, refurbishing press systems and buying or retooling equipment for the new vehicle program. GM had in the past discussed spending about $230 million to upgrade the fab plant, but Flores said he had not heard that figure mentioned.
Plans call for maintaining production of the Cavalier and Sunfire while renovations are under way, Flores said. "The Lordstown Assembly Plant is a high-volume, very important plant to General Motors, and our intention is that we have minimal or no impact on production," he said.
In 2001, the Lordstown plant built about 241,000 Cavaliers and 83,000 Sunfires.
For competitive reasons, Flores said the company will not say whether the Cavalier and Sunfire names will be replaced and will not provide details about the new vehicle until much closer to its release date.
Serious about small cars
"GM's investment in Lordstown signifies that the company will continue to aggressively compete in the very important, small-car segment," said Gary Cowger, president of GM North America and once a manager of the Lordstown Assembly Plant.
Richard Shoemaker, UAW vice president and director of the union's GM Department, praised GM for making a significant investment, saying it will provide job security for "loyal, hard-working UAW members for years to come."
The investment will also contribute to the economic stability of the Mahoning Valley and the state, said Lloyd Mahaffey, director of UAW Region 2B.
vinarsky@vindy.com