The Lordstown quandary and the Delphi dilemma

The bankruptcy of Delphi Corp. and the contraction of General Motors could arguably have as great an impact on the Mahoning Valley as on any place in the United States, save perhaps Detroit.
After the effective loss of the steel industry in the Valley a generation ago, the General Motors complex at Lordstown and the then-Packard Electric Divison of GM in Warren became this area's economic lifeblood. Thousands of area GM workers continued to make things -- things that were sold throughout the nation and the world. And they were paid good wages to do so.
Even then, community leaders talked about the need to diversify, and efforts were made. But automobiles emerged as the primary industry in what had been the Steel Valley.
That history makes this is a chilling time. Even as the Lordstown plant continues to produce the new Cobalt for an enthusiastic buying public, there is cause for concern about the area's economy.
It is difficult, if not impossible, to gauge the effect of large numbers of retirements at Lordstown under the new General Motors retirement incentive plan. About 1,600 of the assembly plant's 3,400 members have 30 years of service and could retire with full benefits. More than 700 of the 1,500 hourly workers at the adjacent fabricating plant have 30 years on the job. Retirement incentives will range from $35,000 to $140,000.
If large numbers of workers took the incentives and stayed in the area, it could actually provide a boost for the economy. Since the plants are operating at full strength, the jobs of workers who resign or retire would be filled by transfer workers from other GM facilities.
But if large numbers took the money and left to spend their retirement years outside the area, the local economy would take a hit.
Now, the tough part
Even more complex is the situation at Delphi Packard Electric Systems, which had been a division of General Motors before it was spun off in 1999 with other suppliers to create Delphi Corp.
What ever retirement incentives Delphi might offer its employees, the larger question remains the cuts in pay and benefits Delphi is seeking as part of its bankruptcy reorganization. The company has set a deadline for late this week to reach an agreement, or it will seek permission from the bankruptcy court to abrogate its labor contracts.
Over the years, Packard Electric, which had its world headquarters in Warren, where the Packard brothers started the company, did what it had to do to compete and to prosper in a competitive market.
While the Valley's steel mills were still operating under an economic model born in the boom days of World War II and the two decades that followed, Packard executives saw that the world was changing.
Not all of the changes were popular; some met strong resistance. But in the early 1970s, Packard's top executives were taking a world view.
Over the years, Packard went from about 13,000 workers in Warren to fewer than 5,000, while its worldwide workforce expanded to almost 30,000. It would have been nice to have those 30,000 jobs in Warren, but had Packard tried to do that, it would have collapsed and all would have been lost.
Had Packard been left to its own devices, rather than spun off with other less profitable suppliers in Delphi Corp., it's likely that there would be a lot less hand-wringing going on today.
That wishful thinking aside, the days ahead are likely to be difficult and significant for the Valley.