Sunday, April 22, 2018
In the year and three months Donald J. Trump has been president, the Mahoning Valley has lost more than 2,600 high-paying, auto-related jobs. At some point in the not-too-distant future – perhaps when General Motors decides to padlock its car assembly complex in Lordstown –Trump’s supporters in this region will experience buyer’s remorse. For now, however, they are clinging to the man who promised to “make America great again.”
But for the Valley at large there’s nothing great about seeing GM’s huge car plant, the mainstay of the area’s economy for 52 years, reduced to one shift. There’s nothing great about seeing friends and neighbors, many in their 50s and 60s, forced to contemplate a life of lowered expectations. And there’s certainly nothing great about hearing a president tout the rebuilding of America’s manufacturing might when the reality is simply that the Valley will never get back the 50,000 jobs that were lost when the steel industry collapsed.
The recent announcement by General Motors that the second shift at the Lordstown complex will be eliminated in two months certainly doesn’t support Trump’s contention that American companies are creating thousands of good-paying jobs because of the tax cuts he and the Republican majority in Congress pushed through without Democratic support.
Here are numbers that Trump’s diehard supporters in Mahoning, Trumbull and Columbiana counties would do well to keep in mind:
The elimination of the second shift at the Lordstown plant that makes the once best-selling Chevrolet Cruze will mean the loss of 1,500 positions. In addition, the end of the shift will result in the loss of 150 jobs at Source Provider in Austintown. The company performs logistics and warehousing for the GM Lordstown complex. An additional 83 jobs will be lost at Lordstown Seating, another GM plant supplier.
Most assuredly, the Valley’s economy will be affected by the loss of income.
Add to this kidney punch the 10 weeks of down production time at the plant because buyer demand for the Cruze has been on a downward spiral, and speculation about the future of what was once the Valley’s leading employer – in its heyday, there were 12,000 workers in the assembly, fabricating and van plants and the paint shop – is to be expected.
In January 2017, about the time Trump was being sworn in as president, General Motors eliminated the third shift, resulting in the loss of more than 600 jobs in the assembly plant and 235 in the fabricating plant. In addition, about 100 union workers at Comprehensive Logistics in Austintown were furloughed. Comprehensive Logistics does sequencing for the GM plant.
Magna Seating Systems in Lordstown, where the seats for the Cruze are built, laid off 75 workers, while Jamestown Industries in Austintown, which makes front and rear bumpers for the Chevy Cruze, shed 15 workers.
Is this what candidate Trump meant when he said he would “make America great again?”
Not surprisingly, the White House has been silent about the economic storms lashing Trumbull County, which voted for Trump in the 2016 presidential election, and Mahoning County, which gave the billionaire real-estate developer from New York City, a sizable vote. Both counties are predominantly Democratic.
Remember the very public threat he made to American automakers that have closed plants in this country and opened new ones abroad? Candidate Trump said he would punish them financially.
The president is well aware – based on a tweet – that a GM plant in Ramos Arizpe, Mexico, is producing a hatchback version of the Chevy Cruze.
In 2016, there were 4,832 Cruze Hatchback models built for the U.S.
So how did Trump punish GM for not bringing that production to Lordstown? By giving the giant automaker and other U.S. corporations a huge tax cut.
Such irony is not lost on U.S. Sen. Sherrod Brown, D-Ohio, who dashed off a letter to GM Chief Executive Officer Mary Barra last week after the elimination of the second shift was announced.
“This decision will be devastating to the families and communities of the workers whose lives will be impacted, and it is particularly galling after your company received massive tax benefits from the recent enactment of the corporate tax bill,” Brown wrote. “I urge you to reverse this decision and instead invest your tax windfall in the facility and workers in Lordstown.”
Indeed, when President Trump signed the tax reform bill, he contended that American companies would reinvest in their domestic operations and create thousands of jobs.
But here’s the dirty little secret about the tax windfall: Savings from corporate tax cuts have gone to executives and investors over workers by a nearly 3:1 margin.
According to published reports, in the first quarter of 2018, corporate America dedicated $305 billion to stock buybacks and cash takeover compared with $131 billion in pretax wage growth.
This isn’t a new phenomenon, which is why the justification put forth by Trump and Republicans in Congress for the tax cuts was flimsy, at best.
Over the past five years, companies have committed $4.9 trillion to stock buybacks and other deals, and $2.3 trillion to wage increases, according to TrimTabs, which compiles market and economic data.
Yes, Trump is making America great again – but certainly not for the 2,600 Valley residents whose lives have been disrupted by General Motors.