GM plant's future up in air

The union says the car plant has been called 'very vulnerable' to closure.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
LORDSTOWN -- General Motors Corp. once again is considering shutting down its Lordstown complex.
Union officials are being asked to make major contract changes if they want GM to commit to the plant beyond midyear 2009.
They have been traveling to Detroit over the past month to meet with senior United Auto Workers officials about what can be done to save the plant.
It's been known for some time that GM has committed to building the Chevrolet Cobalt in Lordstown only until 2009, but word is just leaking out that GM has been pressuring the UAW for cost-saving measures now.
United Auto Workers Local 1112 in Lordstown issued a flier to members Tuesday that said the complex has been identified as "very vulnerable" to closure.
Cal Rapson, an international vice president for the UAW, has told local leaders that GM says it is not making any money on the Cobalt and it could be looking at moving production to other countries.
"Rapson made it clear that the way we conducted business in the past when GM was very profitable would have to change. He made some comments that if we didn't make changes, we couldn't survive in the future," the flier said.
It added that local union leaders believe they "can meet those challenges that are placed before us."
Union leaders could not be reached to comment.
Tom Mock, a spokesman for the Lordstown complex, said he couldn't comment.
Work force trimmed
Earlier this year, the number of hourly workers at the complex was trimmed from 5,300 to 3,700 as GM offered buyout and early retirement incentives to workers. The midnight shift at the complex was eliminated.
Reid Dulberger, executive vice president of the Regional Chamber, said news that GM is looking for other cost-cutting measures is not a surprise.
Union leaders have known that they would have to bargain with GM to receive a new product, he said. Also, GM has made it clear that all of its investment decisions will be based on competitive criteria that evaluate multiple sites.
"We would like to just be approved for a new product, but that's not the way the automotive industry works anymore," he said.
Dulberger said Lordstown made great strides several years ago when GM also was considering closing the plant.
"The improved quality and efficiency gives them a real leg up," he said.
Worked to get the Cobalt
To gain the Cobalt, the union approved a labor deal that combined job classifications and allowed more outsourcing.
After years of uncertainty, GM approved a 1 billion renovation of the complex in 2002. Production on the Cobalt started in 2004.
David Healy, an analyst with Burnham Securities in New York, said GM is doing much better financially on the Cobalt than it did on its predecessor, the Cavalier.
Still, Healy estimates that GM is losing between 500 and 1,000 on each Cobalt that is sold. The loss on each Cavalier was several thousand dollars, he said.
That raises the question of whether GM will decide it has to move small-car production overseas, he said.
"There's a tremendous temptation to do so," he said.
He said he isn't surprised by the uncertainty swirling around Lordstown, given that it has no model scheduled past midyear 2009.
"If you don't have the next product scheduled a few years out, the plant definitely is in jeopardy," he said.
shilling@vindy.com