The Valley dodges a bullet in first round of GM cutbacks

People in the Mahoning Valley had to view the news from General Motors last week with mixed emotions.
GM Chief Executive Officer Rick Wagoner made a favorable reference to several GM products, including the Lordstown-built Chevrolet Cobalt.
That gave folks here a feeling that the Mahoning Valley had dodged a bullet, as Wagoner announced a cost-cutting plan designed to eliminate 30,000 jobs, about a quarter of the company's U.S. manufacturing force. Still, it's hard to celebrate your own measure of security knowing that as many as 30,000 other families are facing years of pain.
Even more bittersweet was Wagoner's reference to eliminating a line at GM's Spring Hill, Tenn., plant, which suggested the possibility that the next generation of the Saturn Ion could be built at the Lordstown plant, along side the Cobalt. GM will first have to decide to go forward with that car, and Lordstown would then have to bid on the project.
Given the success of the Cobalt, the healthy working atmosphere between management and labor at Lordstown and the plant's excellent quality record in bringing the Cobalt on line, Lordstown would seem to be a strong contender for the new car. Still, anyone who remembers the effort this area made in the late 1980s to win a Saturn plant for the Valley, can't take any pleasure in seeing the residents of Spring Hill worry about their future.
More coming
And no area that is as heavily dependent on General Motors as this one is can rest easy. It is clear that more cuts are coming and that they will affect everyone. Just cutting jobs won't save the $7 billion annually that Wagoner needs to make the company profitable. Health care costs, pension costs, job bank costs are all going to be on the table.
General Motors is a huge company and the challenges facing it are proportionate. It now has eight brands marketed in the United States -- Chevrolet, Pontiac, Buick, Cadillac, Saturn, GMC, Hummer and Saab -- compared to Toyota, its emerging rival as the world's largest automaker, which has three.
From 2002 to 2005, GM doubled its buyer incentives, from $2,000 per car to more than $4,000 per car. But it was losing money on many of those sales and running up billions of dollars in losses. During the same time, GM's stock price fell by half to about $25.
And the stock got no bump from Wagoner's dramatic announcement. One Wall Street analyst described the plan as underwhelming.
The auto industry is a mainstay of the U.S. economy and that of Ohio. Gov. Bob Taft announced the Ohio Automotive Revitalization Initiative, which includes tax credits and training grants aimed at restoring competitiveness to the state's auto industry and protecting the jobs of 150,000 Ohioans working in the assembly and parts business.
Clearly no single element is going to save those Ohioans' jobs. Salvation will only come through the combined efforts of the company, workers and government. And customers will make the final call.