GM’s financial growth fuels Valley’s optimism

American engineer, busi- nessman and politician Charles Erwin Wilson proudly told members of the U.S. Senate during his confirmation hearings to become U.S. secretary of defense in 1952 that “what was good for our country was good for General Motors, and vice versa.”

Over the past seven decades, that quote from the then-chief executive officer of the nation’s largest automaker has been paraphrased, popularized and sometimes criticized as an American urban myth.

But, as this week’s GM report showing a whopping 104 percent increase in year-over-year third-quarter earnings illustrates, the analogy tying the auto giant’s welfare to that of the broader U.S. economy is hardly mythical. And when extrapolating it to a more local context – what’s good for GM Lordstown is good for the Mahoning Valley – the message also soundly rings true.

On Tuesday, the company reported a total net income of $2.77 billion for the July through September 2016 quarter, compared with only $1.35 billion in the third quarter of 2015.

“We are on track to deliver a record 2016 on top of a record 2015 and very strong 2014,” said Mary Barra, GM’s chairwoman and chief executive officer, during an earnings conference call.

In North America, GM’s earnings before tax and interest were $3.48 billion, compared with $3.29 billion in the third quarter of 2015.

Those figures stand as a testimony to the ingenuity, diligence, hard work and commitment to excellence of the whole GM family, from its corporate leadership in Detroit to its line workers in the sprawling Lordstown complex. Its ripple effects stretch far beyond the corporate boardrooms of the automaker and the paychecks of its employees.

They serve as another reminder of the importance of those talents to the prosperity of our community and communities like us throughout the nation and the world. On this, the 50th anniversary of the opening of the GM automobile assembly plant in the Valley, the encouraging financial data stand out as another exciting achievement among many this banner year.

Among those are the debut this year of the new and sleek next-generation Chevrolet Cruze. Improvements in its design, technological inner workings and overall value have been warmly received by the American compact-car buying public. Back in Februrary, when some may have been prone to panic over reports that sales of the Lordstown-produced vehicle tumbled 23 percent in January, we urged caution. Sure enough, by August, sales of the updated model soared 50 percent over August 2015 levels, and that trend is revving on.

Also this year, negotiations concluded successfully on new contracts with United Auto Workers Locals 1112 and 1714, representing the approximately 4,500 employees at the plant. Those talks once again illustrated the power of cooperation – not conflict – toward establishing a congenial labor-management atmosphere conducive to productivity and growth.

$44 million local impact

What’s more, contributions of GM to the broader Youngstown-Warren area economy got an added boost this year when workers received profit-sharing checks averaging $11,000.

Collectively, those represented a $44 million impact on the local economy. Even larger checks and greater impact loom in 2017.

GM in the Valley and the nation also have benefited from savvy marketing decisions from corporate higher-ups. For example, GM is changing its focus from large-scale fleet sales to rental-car agencies to individual retail sales.

“Rather than just chasing volume, they are going after more profitable volume,” said Jack Nerad, executive market analyst and executive editorial director at Kelley Blue Book.

GM also completed a $5 billion stock buyback a quarter early during the July through September period, thereby strengthening its lucrative assets.

Judging by the company’s stellar third-quarter earnings report, those creative marketing and investment strategies appear to be producing exceptional results.

It’s no wonder then that optimism permeates the Lordstown complex. As Robert Morales, president of UAW Local 1714 representing fabrication workers there, put it, the robust financial health of GM “ shows confidence in the products in which we are building. You want to see the company do well because we are making the cars for the company.”