Monday, March 25, 2019
Forecasts call for growth, but few jobs
By Justin Dennis
General Motors carried the Mahoning Valley after steel failed, Lordstown Mayor Arno Hill told The Vindicator in 2014.
Without its Lordstown General Motors Assembly Complex, the village “would have been a ghost town,” he said.
That story was published at the height of the Chevrolet Cruze’s domestic sales, when the company was celebrating 50 years since the plant’s groundbreaking and the plant itself sustained about 4,000 jobs.
With the plant’s future now in limbo, analysts and economic development experts are taking a new look at the future of industry in the Mahoning Valley.
And they aren’t seeing many new jobs.
A Cleveland State University study released March 6 – the day of the last shift of GM Lordstown – estimates the plant’s wind-down and shuttering could have a cumulative $8.2 billion impact to the region and lead to “a total loss of 7,711 jobs or 4.4 percent of employment” in the Youngstown metropolitan statistical area.
Northeast Ohio data shows “deep employment losses stemming from the last two recessions” in 2001 and 2007, according to the study, and Youngstown’s has steadily lost half its manufacturing jobs in the last two decades.
A separate study released that same day points to two growing regional industries – oil and gas exploration and smaller “legacy” steel and aluminum manufacturers – that could drive growth in the Mahoning Valley by bringing back high-paying jobs and creating jobs for its suppliers. Those jobs currently account for only 3 percent of the metropolitan area’s workforce, the study shows.
Oil and gas productivity in the region more than tripled from 2013 to 2017 and accounted for a total $2 billion output in 2017.
But oil and gas is not “our next big silver bullet,” said Genna Petrolla, economic development program manager for Eastgate Regional Council of Governments, which commissioned the studies.
James Dignan, CEO of the Youngstown/Warren Regional Chamber, agrees that industry and its “downstream” plastics and petrochemicals production has the largest potential for the area.
However, oil and gas play was only responsible for 1,260 jobs in 2017, according to the CSU study. Most of the work is in upfront, capital-intensive construction, Petrolla said. Once pipe is laid, workers go home.
“You’re not going to see as many jobs coming out of those things, but we have to explore it,” she said.
The metropolitan area’s three legacy manufacturers – local steel and aluminum companies – “have recovered from the recession and are doing well,” accounting for a total output of about $790 million and 4,100 jobs in 2017, the CSU study states.
That’s still a far cry from steel’s heyday.
“Over the last 10 years we’ve slowly lost an overall number of folks engaged and employed in that industry,” Dignan said. “Not because businesses aren’t doing well, because they are. We don’t have the large-scale industrial manufacturing that we used to have.”
Statewide, Ohio’s manufacturing sector grew 11,000 jobs year-over-year from January 2018 to January 2019, despite 1,100 jobs lost just this past January, according to George Zeller, a Cleveland-based economic research analyst. The state’s job growth is currently in a five-month slump, he said.
Though Zeller’s February labor data has yet to include the impact of the GM Lords-town layoffs, he attributed it as one of the “substantial known headwinds that are slowing down Ohio growth early in 2019.”
After being discharged from the armed forces, Tom Koroni started working at U.S. Steel’s Pittsburgh facility. Though it was churning out 250 tons of steel an hour, Koroni’s father saw the end of the line on the horizon, Koroni said. The plant was falling into disrepair and owners weren’t making any improvements.
“He said, ‘Get out. They’re shutting this place down.’”
Koroni and his buddies applied to the newly built GM Lordstown plant on a whim during a day trip to Cleveland Municipal Stadium in 1966. Koroni was in his late twenties. A wife and children came along over his next three decades working at the Lordstown facility.
Not long after Koroni joined the GM family, his former steel mill drastically scaled back – from eight furnaces, to six, then four – part of a three-year loss of more than 160,000 area jobs. The refinery, however, remains open and employs a few hundred people, he said.
Millwrights and other skilled workers who lost jobs on “Black Monday” in 1977 at Youngstown Sheet and Tube ended up joining Koroni in Lordstown, he said.
The plant pumped out 136 Chevrolet Vegas in an hour, he said.
“It was good times in the Valley for GM, the employees and anyone who came there to work for them,” he said.
Koroni, now 80, retired and left the then-healthy Lords- town plant in 2000.
Petrolla said the CSU study illustrates why economic diversification is critical for the Mahoning Valley.
When Koroni was a younger man, it at least made it much easier for workers to land on their feet, rather than in the unemployment line.
“Don’t forget, we had Republic Steel, we had Copperweld, we had so many places. It was so diversified. If you were a young guy or a married guy with a small child, you could go several places to get a job” he said, like Warren’s Packard Electric, which increased Mahoning Valley production in 1955 and 1966 but, like many other manufacturers, started moving labor out of the area in 1978.
Koroni said he can’t fathom GM would walk away from its investment into the Lordstown facility.
“When you’re sitting on $1 billion worth of technology and things like that, to move out – I don’t see that happening,” he said.
“You can’t drop somebody that did that for all those years and say, ‘I don’t need them anymore.’ To me, that’s garbage,” Koroni said.
“You take the good times with the bad times. So the bad times are here for them – for the employees and GM.”