Sunday, March 10, 2019
There’s bad news – and some not-so-bad news – for this region as it comes to terms with the end of car production at General Motors’ Lordstown assembly plant.
The factory fell silent Wednesday afternoon with the last Chevrolet Cruze coming off the assembly line. Now the waiting begins.
GM will only say there are no plans for another product and that a final decision about the future will be made this summer during national labor negotiations with the United Auto Workers. The current contract expires in September.
We have criticized the company, which has been a part of the Valley for 53 years, for not being more forthcoming about its plans. The Lordstown plant’s “unallocated” status simply means there isn’t a successor to the once top-selling Cruze.
The economic fallout from the idling (GM’s word) of the massive assembly complex will be significant, according to a study by Cleveland State University.
The study, conducted in collaboration with Eastgate Regional Council of Governments, found that 7,711 jobs will ultimately be lost.
There were 4,000-plus workers at the plant when it was operating with three shifts. The closing will also impact companies in the supply chain, restaurants, grocery stores and banks.
The CSU economic analysis has concluded that $8.2 billion will be taken out of the Valley’s economy as a result of the Lordstown facility going dark.
The study also estimates a $725 million loss in wages and $34.5 million loss in state and local taxes.
By any measure, General Motors’ decision to end production of the Cruze and not assign another vehicle to be built at Lordstown will continue to send shockwaves through the Valley for years to come – if the closing is permanent.
As many residents will recall, the end of major steel-making more than 40 years ago triggered economic devastation that lasted a long time.
According to some estimates, the closing of the huge mills resulted in 50,000 jobs ultimately being lost in the region.That’s why the recovery has taken so long.
Brain drain
In addition to the job losses, there was an exodus of young people, especially those with college degrees. The brain drain continues today.
One of the main reasons for the slow recovery was the lack of preparedness. The people of the Valley believed steel would be king for years to come, just as they believed that GM would continue making cars in this region far into the future.
Two years ago, we urged political, business, labor and community leaders to begin thinking about a future without GM. We were well aware that some residents would accuse us of being too negative, but we believed the elimination of the third shift in January 2017 was an indication of things to come.
That day has now arrived and the decision-makers in the Valley must figure out how to proceed.
There was a second study by Cleveland State University that identified the industries in the Youngstown-Warren-Boardman area that are doing well financially. The study also outlined ways they could be improved.
The analysis noted that manufacturing remains an “industry driver” even though it has suffered significant job losses over the past 20 years. Metals and aluminum also remain important to the region’s economic stability.
Oil and gas exploration, health care and technology hold out the promise of job growth.
An important recommendation that demands the attention of the region’s political and business leaders is the hiring of a “recovery coordinator” who would help create a blueprint for the Valley’s economic future.
After the collapse of the steel industry, “diversification” became the watchword with regard to the economy.
Steps are being taken in that direction, but with the closing of the GM Lordstown plant there is an urgent need to find a new occupant or occupants for the vast assembly complex should the giant automaker pull up stakes.
Ohio Gov. Mike DeWine has pledged to do whatever is necessary to ensure that the Valley is not burdened with an empty cavernous structure. DeWine insists that JobsOhio, the state’s quasi-public economic development entity, will work closely with local officials.
We urge the governor to meet with Valley stakeholders to discuss the appointment of an experienced, qualified “recovery coordinator” to chart the Valley’s economic future. The state should pay his or her salary.
To be sure, the potential loss of the auto industry after half a century has sucked the air out of the region, but our people are resilient and will weather this storm.