Saturday, March 2, 2019
By GRAIG GRAZIOSI
ggraziosi@vindy.com
LORDSTOWN
There is a perverse anticipation that some people experience when – after a long period of suffering and deterioration – a dying loved one succumbs to their ailment.
It’s not that we want the loved one to die, and it doesn’t lessen the grief that necessarily accompanies the passing of a loved one. But relief the ordeal is over no less exists.
General Motors’ employee-discount program is called “Family First.” Its holiday ad campaign featured smiling middle-class moms and dads and kids in colorful winter outerwear standing next to GM products and beckoning the public to “join the family.” And the Drive-It Home Campaign, championed by the village of Lordstown, the United Auto Workers Local 1112 and the Youngstown/Warren Regional Chamber, frequently argued to GM they were happy members of the family, and wanted to remain.
So it’s not hyperbole to describe the Nov. 26 announcement that GM is closing five North American plants, including the Lordstown Assembly Complex, as a terminal diagnosis, and the plant’s idling this week as its death rattle.
And it’s not surprising that for some, as much as it pains them to see the plant close, there will be some relief that – barring some midnight call to stay the execution – this will all be over soon.
TENSION IN TOWN
For Dave Green, president of United Auto Workers
Local 1112, and the workers he represents, stress has been a constant companion since the announcement.
“Quite frankly it’s extremely difficult right now. The company has put an extraordinarily large amount of stress on our members, and let’s face it, the people in our communities,” Green said. “I’ve talked to teachers and business owners who are saying ‘What are we going to do?’ It feels like we’re playing poker and making a huge bet, but we can’t look at our cards.”
Joel Albright is a GM worker with 20 years at the plant. He’s a team leader who oversees six assemblers. With only 10 years until he hits his 30-year mark, he’s hoping GM will send a new product to the plant. But he’s also ready to move on.
“I’m going to take advantage of the tuition assistance they’re offering us and try to get an associate degree in business management and try to find something good around here,” Albright said. “I’ve always wanted to start my own business.”
The tension in Lordstown as everyone waits for the last Cruze to roll off the line isn’t reserved for workers at the plant; the surrounding community is sharing in the burden. Even Mother Nature, lacking in subtlety but excelling at timing, sent high winds through the Valley just in time to tear down a part of the iconic blue and white Lordstown East Plant sign.
Lordstown Mayor Arno Hill, who has overseen a tumultuous period of the village’s history – the opening of the Anderson-DuBose headquarters, the construction of two power plants, the TJX site battle and now the closing of the Valley’s manufacturing linchpin – is ready for what’s next, regardless if that involves GM.
“What’s next, I guess, is right now everything is up in the air, and all the cards are on the table,” Hill said. “Right now we’re all trying to guess what GM is going to do. I’d try to read their minds, but they’re not giving me any material right now.”
As for Green, he’s still holding firm to the idea that GM can get the plant back up and running. He can’t believe
otherwise.
Green stepped into leadership at the union just in time to face the unenviable task of navigating an existential threat to the plant. Since November, he’s had to walk the tightrope between taking a strong stance against GM for cutting and running during a period of record-breaking profits and not burning his bridges with the company in hopes it will send a new product to the plant.
Green has an editorial cartoon taped to his desk at the union hall. It depicts GM CEO Mary Barra receiving a heart-shaped box of red, white and blue M&Ms with messages like “Save our Jobs” and “Save Lordstown Mary” printed on them. When Barra realizes they’re from Lordstown, she tells the person delivering them “you go first.”
The implication is that Barra fears the GM workers are out to exact revenge on her for closing the plant using tainted M&Ms.
In reality, the community did send Barra that box of M&Ms on Valentine’s Day. They were one of many attempts by the Drive It Home campaign – including letters from local school children decorated with crayon-drawn cars and depictions of their auto-worker parents and a trip to Columbus to rally support among the local delegation at the State house – to appeal to Barra’s sense of morality that closing the plant is wrong. Not that it didn’t make business sense, but that it is the wrong thing to do.
SAYING GOODBYE
As the last week begins, about 1,500 workers still show up to work at the plant. Before the Nov. 26 announcement, Green said nearly 300 workers left or sought transfers away from the plant. Since the announcement, another 400 have left.
Albright said he’s had to say goodbye to more than 40 co-workers and friends since November.
“For me, a lot of my buddies are already gone. A bunch are in Fort Wayne [Ind.], 10 went to Flint [Mich.], five went to Toledo, about 30 went to Spring Hill [Tenn],” Albright said. “Friends of mine left their wife and kids behind. I’ve talked to them on the phone, it’s been rough on them not seeing their wives and kids. They don’t want to uproot their kids; they’ve got homes here. One buddy has 15 acres and a new house he built in ’06. He doesn’t wanna give that up so he went to Toledo.”
Albright is staying in the area. His children are athletes in the Canfield school system, and his entire extended family is local. He doesn’t want to uproot their lives.
“I’m not going to follow the company around the country,” Albright said.
He said if the plant gets another product he would consider going back to finish out his last 10 years at GM, but he’s mentally preparing for the next step.
“Honestly if I find something that pays a couple dollars less but it’s something I like doing, I probably wouldn’t go back,” he added.
Despite the exodus of workers, Green says the plant’s production hasn’t dropped.
“Since the announcement, our productivity has kind of gone up. I think the company was concerned coming after an announcement ... that there’d be sabotage or workers would slow down,” Green said. “To the contrary, our members have stepped up and done an exceptional job in focusing on protecting the customer. We take a lot of pride in our work. I drive a Cruze, my daughter drives one. There’s pride there.”
SMALL-CAR DEATH
The accepted wisdom behind why the Lordstown plant is among those closing is tied directly to small-car sales, which itself is directly tied to two decades of fluctuating oil prices and changes in federal fuel-efficiency standards.
In 1999, oil prices opened at $19.35 a barrel and by the close of the year had jumped to $25.76, representing a 112.19 percent annual change. From there, prices mostly rose – excepting a 53 percent drop during 2008 in response to the global recession – until the oil crash in 2014.
During that time, car manufacturers responded to consumer demands by prioritizing fuel efficiency in their vehicles. Small cars thrived because of their superior fuel consumption. All the while, however, manufacturers continued to improve the mileage that crossovers and SUVs could achieve.
By the time the oil market crashed in 2014 – crude oil opened that year at $93 a barrel and closed at $53.45 – vehicle manufacturers had responded to a 2007 congressional increase in fuel-efficiency standards that called for cars, SUVs and trucks to improve by 40 percent by 2020.
The combination of low oil prices paired with improved fuel efficiency for larger vehicles resulted in an increase in consumers turning to the larger vehicles.
Auto analysts now believe SUVs will make up nearly half of all new vehicles on the market by 2020 and will constitute nearly 40 percent of the vehicle market by 2025.
At the height of the car’s run, America bought 273,060 Chevrolet Cruzes in 2014. In 2018, that number fell to 142,617.
The rule of the midsize and larger vehicles is apparent in GM’s most recent investment decisions.
In November, GM announced it would begin production on a third vehicle – a Cadillac crossover – at its Spring Hill, Tenn., plant, where it already builds the Cadillac XT5 and GMC Acadia midsize SUV.
Then in February, GM announced it would invest $36 million at the Lansing Delta Township Assembly plant in Lansing, Mich., to allow for increased crossover production.
In 2018, GM posted third quarter pre-tax earnings of $3.2 billion with an 8.8 percent profit margin, a 25 percent increase over the same period in 2017. Its North American markets increased from $2.1 billion in 2017 to $2.8 billion.
WHY NOT LORDSTOWN
The Lordstown facility uses a ground-track system to move cars throughout the facility as they’re being built. According to GM, the track can only accommodate small cars.
Dan Crouse, a real-estate manager with Platz realty group, said that modern plants often use overhead carriages that hang from the ceiling to move products throughout the building. The overhead systems are cheaper to change, making it more viable to introduce different products into the production line.
The 6.2-million-square-foot Lordstown facility opened in 1966, almost a decade before the then-township of
Lordstown incorporated into a village.
At the time of its initial construction, it was the largest auto manufacturing plant in the world, and included a van manufacturing facility that closed in 1992. Losing the van facility meant the main plant could only accommodate one type of vehicle.
“Form follows function. The form of the building has to follow the function it’s going to perform. What does that building do, what can it do? The only thing it can do is the smaller vehicle,” Crouse said. “Could it do a Tesla? Yeah, in theory it could. Could it be an Amazon fulfillment center? Sure. The building has to do a function, therefore if a building doesn’t do a function, you either build a new building or rebuild an old one, and rebuilding an old one most of the time is much more expensive than building from scratch. So if GM doesn’t have a product they can build in that building, what’s next?”
WHAT’S NEXT?
The loss of the GM plant isn’t just the loss of a major employer; it’s the loss of a part of the entire region’s identity.
Before Sam Covelli bought the naming rights to the downtown arena, it was called the Chevy Centre. Our Place diner, across the street from Lordstown High School, offers a menu item called the “GM Chicken Fenders.” The massive plant serves as a kind of Colossus of Rhodes, towering over the turnpike to announce to travelers they’ve officially entered the Valley.
“Lordstown’s been an anchor in this community,” Green said. “After the steel mills closed people said, ‘Oh well at least Lordstown’s still here; at least Delphi is still here.’ Delphi had 18,000 to 19,000 people working in Warren at seven different plants, Lordstown had 14,000 working in three different plants.”
Hill is confident that, regardless of how things shake out, Lordstown will find its identity, if not in future business ventures, then in itself.
“What are we gonna be known as? If we get another product we’ll be known for that. We’re known for the power plants, for TJX. There’s nothing wrong with just being known for ourselves, either. We have a lot of great people here,” Hill said.
One bright spot for Lordstown that GM can’t take with it is the manufacturing infrastructure found in the village.
“There is nowhere with the volume and quality that we have here. There is nowhere that has the infrastructure that is as underutilized as ours. If you look at Warren, it draws 45 percent of the water it could be drawing. The Mahoning Valley Sanitary District has the same thing. We’re going to have two power plants here. Sewers with excess capacity, highways, the finest rail anywhere in the country,” Crouse said.
“You have sea-way to the north and south of us by 50 miles. You have all the oil and gas under our feet that we could possibly use. Everything that was old works for the new economy.”
Lordstown’s infrastructure and the size of the plant have played a central role in the attempts by politicians representing the area to court new major investment in the region.
U.S. Rep. Tim Ryan of Howland, D-13th, made an appeal to Amazon to move its canceled New York headquarters to Lordstown. Former Gov. John Kasich reached out to Elon Musk, the CEO of Tesla, on Twitter to have discussions about bringing a new plant to the region.
Regardless of whether the Hail Mary business pitches attract a major company or the plant actually does receive a new product, Crouse believes the worst possible scenario for the plant would be for it to sit empty for several years.
“First, the skilled trades needed to run the plant are going to leave and do something else. Will they come back? Who knows. Have they moved, have they retired, have they found another job? Will they get on that roller-coaster ride again?” Crouse said. “What about CSX and Norfolk Southern [railroads]?”
Should the plant sit cold for two years, there is also the very real possibility that GM will seek a readjustment on the value of the plant to reduce taxes paid on the facility.
“It could monumentally impact the village. It will affect the schools, roads, everything,” Crouse added. “Eliminating that income to the village will radically change the village’s operations budget.”
DEMOGRAPHICS
Though the closure may not specifically hurt the village of Lordstown in terms of population loss – about 50 percent of the village is under agricultural usage valuation, and GM employees live everywhere from Bristolville to Poland Township – Lordstown’s demographics have skewed increasingly older in recent years.
According to U.S. Census data, population in the village has decreased every year since 2000, and the median age of residents is 43. Hill wants to ensure the village’s residents are still provided the same services after the plant closes.
“We have a lot of retirees here, retirees who’ve paid the way. So what do we do to keep making sure we can provide the services we provide to them at a very reasonable cost?” Hill said. “We’ve got one of the lowest tax rates in Trumbull County. Best roads, great parks. All that costs money. If the tax base disappears, you know, people can say how do you do the same with less? I guess we just have to keep looking to figure out what’s next.”
STILL BATTLING
While those caught in the maelstrom caused by the announcement of the plant’s closure may be ready for the inevitable this week, few are ready to throw in the towel.
Hill is anticipating a groundbreaking for the TJX HomeGoods distribution center that generated controversy last year when a group of residents pushed to block the development over real- estate concerns.
“As far as TJX coming, a lot of other companies are watching very closely to see how this project pans out. I think in two months we’ll have a groundbreaking. After that, I think other companies will come looking to set up shop. We have the perfect location,” Hill said. “If something would happen to prevent that project, I think we’re done for a generation.”
The effort to keep the GM plant open will continue after the last car rolls off the line
James Dignan, the CEO of the Youngstown/Warren Regional Chamber and a leader of the Drive It Home campaign, said the campaign would shift focus after the closure. Rather than centering on local events, he said the group would work to put more pressure on GM in Detroit and will travel to other regions impacted by shutdowns to build solidarity and keep the Lordstown plant fresh in the minds of GM’s leadership.
Green will continue in his role as the local UAW president and will travel with the Drive It Home campaign to continue to lobby for a new product. In his mind, GM has a moral obligation to keep Lordstown open, and he’s going to keep pushing.
“GM asked taxpayers a decade ago to support them. ‘Help us so we can keep America working’ they said. OK, well, the taxpayers stepped up and did that. GM asked these unions to step up and make concessions, and we’ve done that. I supported them in 2007. In 12 years, my salary has increased by $1,” Green said. “We agreed to concessions, we agreed to more outsourcing, we agreed to tier 2 wages. Locally we agreed to combine local unions. We’ve agreed to all these things the company says they need to compete.
“GM has an obligation – they need to be good corporate citizens – and I believe they have a moral obligation to allocate product here.”
LEGAL ACTION
The best chance for Green to get what he wants may be for the international UAW to succeed in a lawsuit it filed against GM alleging the company breached its contract with the union by closing plants before the contact’s Sept. 13 expiration date.
The contract includes a provision barring the company from closing any plants before the end of the contract period. GM alleges it hasn’t closed any plants, but has rather “idled” them, which effectively leaves the plants in a sort of limbo state; not fully closed, but also producing nothing and employing only the skeleton crew necessary to keep the plant in “ready” status should a new product be allocated.
The lawsuit and upcoming September contract negotiations are the last chance the UAW will have to pressure GM into sending Lordstown another product.
“Make no mistake, I do believe our fate will ultimately rest in the hands of the international union at the bargaining table. When GM is ready to sit down with the state and local government and the union, the table will already be set for them and they know that,” Green said.
While the machinations of multinational corporations, congressional delegates and international labor organizations rumble, the workers at the Lordstown plant will continue doing what they do every day.
In the waning days of the plant, as the last cars are assembled, the workers will shut down each department behind the final car. First the stamping department will close. Then the body shop, the paint shop, the trim department, the chassis and then the final touches will be put on the last car, and the workers will go home.
The plant will technically remain open in an extremely limited capacity for the production of replacement parts for current Cruzes, but the plant will be all but empty.
For Albright, he plans to spend the last day with what friends of his remain.
“After the last build, we’ll all probably go out and grab a drink. It’s going to be a sad day, and we’re all gonna hope and pray we get a product back,” he said.
“I just hope the whole Valley can just rally behind the plant and that we get something back. That’s all I hope for.”