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2016 Business news: Blue collar pride and tech life are both alive
By Kalea Hall
YOUNGSTOWN
Trends hit the Mahoning Valley hard this year.
A switch in consumer preferences cost the Valley 1,245 jobs at General Motors Lordstown.
Meanwhile, the trend of city living kept downtown Youngstown alive.
For both good and bad reasons, the Valley was thrust into the spotlight – making the nation see the changes happening here and some of the negative effects of a rusty past.
Our Valley’s business news showed this area is still blue- collar and proud of it, but a burgeoning tech scene is also putting us on the map.
CRUZIN’
The Lordstown-built Chevrolet Cruze is not only a symbol of Valley pride, but it has become a top contender in the car market nationally. Its success in the first five years on the market pushed the Lordstown name out there. This year, the Lordstown plant was the launch point for the Cruze globally.
The launch has been a bumpy road for the local plant. Supplier issues put the plant behind schedule. Dealers’ supply levels were behind what General Motors wanted to see, so the automaker decided to bring in Cruzes built at the Ramos Arizpe, Mexico, plant to supplement the U.S. supply.
The need for more Cruzes died down as the small-car market took a hit nationally. Demand for larger vehicles took away interest for smaller ones.
The day after the general election, GM announced it would cut the third shift at the Lordstown Assembly Complex, costing 1,245 jobs at that plant and hundreds of jobs at other local plants that support GM Lordstown. The cut will become official in January. At the same time, GM will stop bringing in Mexico-built Cruzes to the U.S.
Union leaders, while saddened by the loss of jobs, reminded Valley residents the plant is resilient and will keep adapting to keep building vehicles.
The ending of the third shift at Lordstown comes after this year’s 50th anniversary for the local plant. In May, the plant celebrated its history of building vehicles – more than 16 million – with an open house for the public.
Lines of people waited to get a chance to see inside the plant. Some were GM retirees who wanted to return, while others were just interested in how the popular car was made. A total of 10,000 came out to see the plant and check out the new next-generation Cruze.
The Lordstown plant is 6.2 million square feet and sits on 1,100 acres. It has more than 23.5 miles of conveyor, making it one of the world’s largest single-line manufacturing facilities.
DOWNTOWN’S ALIVE
One fine Tuesday in March was a happening night in Youngstown. At the Covelli Centre, Elton John took the stage, and ZZ Top rocked Stambaugh Auditorium.
Having not one, but two major acts come to Youngstown brought out the people to the restaurants and bars.
Dominic Marchionda, chief executive of NYO Property Group, a Youngstown development company, saw the need years ago to have a hotel downtown. Now, with the concerts here and newfound life, he sees a hotel as even more of necessity. The multimillion-dollar DoubleTree Hilton hotel project is expected to be finished by the end of 2017.
In 2016, downtown saw the addition of more apartments with the completed renovation of the historic Wells Building by Gregg Strollo Architects. The building, at Federal and Phelps streets, will turn 100 in 2017. Early this year, the building opened up as the new Strollo Architects headquarters and an apartment complex with 12 apartments.
An important piece to the downtown transformation is the Youngstown Business Incubator. The technology-based incubator has consistently put the city on the map. Late last year, the local incubator took second place in the world as a University Associated Incubator and first place in North America. In 2014, the incubator was No. 1. in the world.
The incubator is now in the midst of renovating the fifth building for its prospering campus. The old Vindicator building at 29 Vindicator Square will be home to the incubator’s additive manufacturing portfolio companies. It will be finished in 2017.
AIRLINE LAUNCH
After 14 years without a daily air service, leaders at Youngstown-Warren Regional Airport were thrilled to announce the arrival of the Great Lakes JetExpress by Aerodynamics Inc. of Kennesaw, Ga. The airline’s Embraer ERJ-145 launched flights from Youngstown’s Vienna airport to Chicago O’Hare International Airport on July 1. The flight also was the first commercial flight for Aerodynamics, a longtime charter airline.
But the excitement for the airline was short-lived. Poor ticket sales led the Western Reserve Port Authority, the body that oversees airport operations, to stop funding the flights. On Aug. 24, the last Youngstown/Chicago Great Lakes JetExpress flight made a final landing in Vienna.
The WRPA board of directors believed the ticket sales weren’t strong because the airline did not have a solid interline agreement for ticketing and baggage with United, a major legacy carrier in Chicago.
BIG NEWS IN LORDSTOWN
This year was a big year for the village of Lordstown.
In June, officials hailed the opening of a $100 million aluminum-billet plant. The Giampaolo Group of Canada built the 225,000-square-foot Matalco and Triple M Metal LP plant in the village to have a more-central location for customers. The plant, which employs 55, was the second U.S. investment for the Giampaolo Group, which also has a plant in Canton.
The new plant uses “the world’s most technologically advanced fully automated equipment to produce aluminum billets,” according to the company’s website. The plant is capable of producing more than 1 million pounds of billet per day when in full operation.
Also in Lordstown, construction on the $890 million Lordstown Energy Center, a gas-fueled power plant, began this year. Clean Energy Future, the developer of the project, will employ 20 full-time workers when the plant is completed in 2018. Natural gas emanating from the Utica gas formation and piped to Lordstown will be the only fuel used at the LEC. Dominion East Ohio will provide delivery of gas from the gas-pipeline system to the plant. Kokosing of Fredericktown and Columbus is the general contractor on the project. Union labor will be employed on the site and peak at about 450 to 500 workers, according to The Vindicator files.
NEW JOBS, LOST JOBS
But the Valley’s business news wasn’t all rosy.
Right at the start of 2016, Warren Steel announced it would close because of “unforeseen business conditions.” Warren Steel, affiliated with Optima Speciality Steel based in Miami, engineered steel products used in a variety of industries, including aerospace, mining, construction, automotive and agriculture.
The local plant felt the impact of the lagging steel industry, which has dealt with the effects of a strong dollar, weak global demand and a buildup of inventory. A total of 162 employees were affected by the closing.
The Valley also felt the impact of the ever-changing retail industry. Kmart closed the Boardman and Warren Kmart locations. The Warren location employed 63, and Boardman employed 81. Back in January, a company spokesman said “store closures are part of a series of actions we’re taking to reduce ongoing expenses, adjust our asset base and accelerate the transformation of our business model.” Through the third quarter, which ended Oct. 29, a total of 140 Kmart stores and 20 Sears stores have been closed.
ValleyCare Health System of Ohio is another business that made headlines for layoffs this year. In April, ValleyCare, which operates Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren, Hillside Rehabilitation Hospital in Howland, and Sharon Regional Health System in Sharon, Pa., laid off 68 full-time-equivalent employees at Northside. In November, ValleyCare laid off more, but did not specify how many.
This year, Community Health Systems, ValleyCare’s parent company, announced it would sell 17 hospitals.
Three Mississippi hospitals and one Florida hospital will be sold to Curae Health Inc. CHS, based in Tennessee, signed a definitive agreement to sell two Washington hospitals to Sunnyside Community Hospital & Clinics. The remaining hospitals to be sold and their purchasers haven’t been named.
The assets of the 17 facilities account for $2 billion in annual revenue. Proceeds from the transactions, which are expected to close between the fourth quarter of 2016 and the second quarter of 2017, are listed at $1.2 billion. The proceeds will go toward debt reduction.
Community reported a loss of $79 million in its third-quarter earnings, which compared with a profit of $52 million in the same quarter a year earlier.
Another Valley health care provider, Southwoods Health, made headlines this year for throwing a Lionel Richie “Concert for the Valley.”
The concert was created to celebrate the 20th anniversary of the Surgical Hospital at Southwoods. Ed Muransky, president and CEO of the Muransky Companies and Southwoods Health, saw the concert as giving back to the community. The Aug. 27 Covelli Centre concert, which was the only U.S. stop Richie made outside of Las Vegas, was sold out.
PRESIDENTIAL IMPACT
Presidential candidates made certain to make stops to the Valley’s blue-collar businesses in 2016.
BOC Water Hydraulics at 12024 Salem-Warren Road was visited by Republican presidential candidate U.S. Sen. Marco Rubio of Florida. In March, Ohio Gov. John Kasich, a Republican presidential candidate, visited Brilex Industries on Andrews Avenue in March.
With the Republican National Convention in Cleveland this year, the Youngstown/Warren Regional Chamber decided it would be a good time to show off what the Valley has to offer with 3-D printed life-size bobblehead statues of Hillary Clinton, the Democratic nominee for the president, and now President-Elect Donald J. Trump.
The statues were designed and produced by Freshmade 3D, with assistance from Youngstown State University and Humtown Products in Columbiana. The bobblehead statues received international and national attention.