LDN - Business

At shuttered Ohio plant, workers still hope for new GM vehicle

[September 23, 2019] By Nick Carey

LORDSTOWN, Ohio (Reuters) - When asked about reports General Motors Co <GM.N> may turn its shuttered Lordstown, Ohio, plant into a battery factory, "Buffalo" Joe Nero snorts and points at the vast complex that until six months ago made the Chevrolet Cruze.

"You can't support a plant like this making batteries. We need a new vehicle allocated to us," said Nero, 62, who has worked at five plants over 42 years with the No. 1 U.S. automaker.

"It wouldn't even cover 10% of the facility or hire 10% of the people, and they wouldn't pay enough to support yourself, let alone a family," he said.

The United Auto Workers (UAW) union, which went on strike last week, agrees.

The sprawling Lordstown plant at one time employed more than 4,500 workers. GM's decision to close it and three other U.S. facilities due to sagging U.S. passenger car sales has drawn widespread criticism, including from President Donald Trump. Ohio is a crucial swing state in the 2020 presidential election.

The closure is part of the reason for the UAW strike, to demand that GM build another vehicle there. The union also wants GM to reduce the use of temporary workers and share more of its profits, a decade after the union helped the company through a government-led bankruptcy.

Visiting nearby Youngstown soon after becoming president in 2017, Trump told workers that factory jobs would not leave, advising them: "Don't move, don't sell your house." Since GM's announcement, Trump has urged the Detroit company to move vehicle production back to the United States from Mexico.

As part of contract talks with the UAW, GM has suggested the Lordstown facility could be converted to an electric vehicle (EV) battery plant. Separately, it says it is also negotiating to sell the plant to a group affiliated with EV start-up Workhorse Group Inc <WKHS.O>. Workhorse declined to comment.

In Washington in June, GM Chief Executive Mary Barra defended the Workhorse plan. She also told Reuters that GM had no intention of building a new vehicle in Lordstown.

Lordstown workers say that's the only way there will be enough well-paid manufacturing jobs for the community. They - and the UAW - place the blame squarely on GM.

"You did everything GM ever asked of you and it still wasn't enough," UAW Local 1112 president Tim O'Hara told 100 cheering workers during a rally outside the plant on Friday. "We're going to hold the line as long as it takes."

The reality is that GM needs to cut back underutilized U.S. manufacturing capacity even at current levels, said Sam Fiorani, a vice president with Auto Forecast Solutions.

"There's no chance that GM is going to put a product back into that plant," he said. "They have too much capacity as it is."

GM's capacity utilization rate in its North American plants is about 75 percent, excluding idled assembly plants in Lordstown and Detroit, research firm LMC Automotive said.

THE LAST CRUZE

The 6.2-million-sq foot (576,000 sq meters) Lordstown complex has manufactured more than 16 million vehicles since it opened in 1966. The last Cruze rolled off the line in March.

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A mural is seen on the side of General Motors' shuttered Lordstown Assembly plant during the United Auto Workers (UAW) national strike in Lordstown, Ohio, U.S. September 20, 2019. REUTERS/Rebecca Cook

Most workers here have taken transfers to other GM plants. But around 450 workers have not, many because they did not want to uproot their families.

Even if the Workhorse deal goes through, workers wonder how many people the plant would employ, whether they would still be working for GM and what kind of pay cut that would entail.

UAW workers at the top of the wage scale earn about $31 an hour, compared with the $15-$17 an hour workers are paid at a GM battery plant near Detroit that operates under a side agreement.

Analysts said neither a Workhorse nor a GM plant would be likely to employ even half the plant's previous workforce.

"Nothing other than vehicle production has even a hope of replacing the jobs and income and economic impact of what was previously there as an automotive assembly plant," said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research based in Ann Arbor, Michigan.

The UAW said in a 2018 research paper that the disruptive effect of electric vehicles and their less complex batteries compared with gasoline-powered engines meant that fewer workers were going to be needed in the future.

Teresa Oakes, 44, has done the math.

"If they made batteries here it would allow them to lower wages to the bare minimum," said Oakes, who worked at the plant for 10 years. "GM should bring back vehicles they make in Mexico and have them made by U.S. workers instead."

Most other jobs in the Lordstown area pay less, including at warehouses like the one discount retailer TJX Companies Inc <TJX.N> is building nearby.

Rick Michaels, 49, took a transfer to a plant in Lansing, Michigan, and travels 4-1/2 hours home every weekend to see his family. He was on the picket line at Lordstown all week.

"If GM opened a battery factory here, that would barely employ all the people here," Michaels said on Friday, pointing at the rally crowd. "There would be no way for me to get back home."

Doug Grant, 59, was picketing in a homemade T-shirt that read "DID YOU MAKE $21,905,256 IN 2017" on the front and "MARY BARRA DID!" on the back.

Grant, who said he declined to take a transfer to another GM facility, said it could take years to get a battery plant up and running.

"That's way too long," he said. "That puts me right out of the game."

(Reporting By Nick Carey, additional reporting by Ben Klayman in Detroit; Editing by Sonya Hepinstall)

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