2018 comes to close withSFlbGM Lordstown teetering
A careful reading of the Dec. 21 letter from a vice president of General Motors to Ohio’s two U.S. senators, Sherrod Brown and Rob Portman, about the future of the Lordstown assembly complex reveals why GM CEO Mary Barra didn’t put her name to the correspondence. It’s loaded with corporate gobbledygook.
The bottom line: Democrat Brown and Republican Portman – and by extension the people of the Mahoning Valley – are no closer to knowing what lies ahead than they were when Barra, who also is company chairwoman, announced that production of the Chevrolet Cruze would end in March.
The senators had written to the CEO several weeks ago seeking answers to numerous questions about the company’s decision to idle four U.S. plants, three assembly and one parts. They also wanted to know if the Lordstown complex is on the company’s radar for a new product.
Their letter was prompted by meetings they had with Barra in Washington during which she refused to make any commitments about GM’s future in the Valley.
Indeed, she told the senators the softening sales of the once top-selling Chevrolet Cruze had forced GM to reassess the economic value of building sedans at a time when trucks, crossovers and SUVs are the rage.
As for why another model was not assigned to the Lordstown plant to replace the Cruze, Barra told Brown and Portman that production plans are made years in advance.
She also said Lordstown would have to be retooled and a new paint shop built to accommodate vehicles larger than a compact car. Such upgrading would be costly, she said.
The senators let it be known publicly they weren’t satisfied with Barra’s explanation for why GM is closing plants in the U.S. while expanding production in Mexico and other countries.
Therefore, the questions they posed in the letter were designed to elicit details about the plant-closing decision that GM has chosen not to make public.
The reply from Dan Turton, North America vice president, public policy, failed to provide any insight. Turton simply rehashed what is already known.
Indeed, the fact that Barra chose not to respond to Ohio’s two senators and assigned the task to an underling sends a disturbing message about how GM views its responsibility to the Mahoning Valley that has been its partner for more than 50 years.
It also suggests that the future of the Lordstown assembly complex is not a priority for decision-makers in Detroit.
We were intrigued by Turton’s verbal gymnastics as he sought to explain why GM decided to build the Chevrolet Blazer in Mexico rather than Lordstown. He noted that the Valley plant was operating on three shifts when the decision on the Blazer was made.
Turton also discussed the inadequacy of the paint shop, saying that while it was upgraded in 2004, it is unable to accommodate a vehicle of the Blazer’s size.
“Paint shops are generally a 30-year minimum asset, which means they are not rebuilt solely for the size requirement of individual vehicles, but for the long-term. The new Ramos Azipe paint shop, for example, is not being built specifically for the Blazer and will not be completed until at least 2021,” Turton wrote. “It is part of GM’s investment in paint shops asset sustainment and is the most recent of eight paint shop projects since bankruptcy. It has been preceded by more than $2.5 billion invested in U.S. paint facilities since 2011.”
What does that mean for the Lords- town assembly complex? It isn’t clear, but there is a way to force GM’s hand, as we have recommended in this space:
Outgoing Gov. John R. Kasich and incoming Gov. Mike DeWine, both Republicans, should publicly announce that the state is prepared to put up the $200 million for a new paint shop in the Lordstown complex. That would remove a major impediment to the plant getting another product after the Chevy Cruze is shelved.
The commitment from state government would put the onus on CEO Barra to publicly explain why such a lucrative incentive makes no difference when it comes to deciding Lordstown’s future.
The letter from Turton to Brown and Portman makes this much clear: GM is on a public relations campaign to soften the blow should the company decide to snub the Mahoning Valley.