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Impact of GM Lordstown Shutdown Will Be Felt for Many Years


New Chevy Cruze models at Lordstown 

By Jordyn Grzelewski

The Youngstown Vindicator

jgrzelewski@vindy.com

LORDSTOWN, Dec 2, 2018 – Michelle Ripple has experienced the ups and downs of the General Motors Lordstown plant her entire life.

Her father worked at the plant for more than 40 years; she’s worked there for 18. The 49-year-old mother of three works as a carpet retainer installer.

Like many in the Mahoning Valley, the plant has been an integral part of her family’s history and ability to earn a living. Extended family members have worked there, too, over the years. At family gatherings, these were the people who Ripple could talk to about her work, knowing they would get it.

So when Ripple, of Hubbard, was called into a packed meeting at the plant Monday morning – where workers learned that GM will cease production of the Chevrolet Cruze and indefinitely idle the plant beginning March 1 – the news packed a punch.

“[I was] shocked,” said Ripple. “I just stood there like a mummy, not moving.”

She tried to shield her youngest daughter from the news, but the 14-year-old couldn’t miss the nonstop news coverage or talk at her school.

“She’s very emotional,” said Ripple. Her daughter is worried about what will happen with the family’s finances; Ripple assures her they will survive.

Ripple knows this is true – but that doesn’t mean she knows what to do next. She’s weighing her options as March 1 looms. The uncertainty is hard, for her and other Lordstown workers who shared their stories this week.

But despite the grim news, many expressed hope that this isn’t the end of the plant. They’re staving off that thought, at least for now.

That would be too much.

“I’ll have hope until the very end,” Ripple said.

GM PRIDE

It wasn’t clear at the time, but General Motors came to the Valley at an opportune moment.

The plant’s first car – a Chevy Impala – rolled off the assembly line April 28, 1966. A little more than a decade later, the Valley would be brought to its knees by the collapse of the steel industry.

Over a several-year period, steel mills across the Valley shuttered, beginning with the sudden and devastating closure of Youngstown Sheet & Tube Co.’s Campbell Works. The announcement came Sept. 19, 1977 – a date now remembered as Black Monday. Just like that, thousands of jobs went up in smoke. Thousands more steel jobs disappeared in the next few years.

But at least the Valley had GM.

“That was all happening from 1977 to 1980, and at the same time, General Motors was expanding,” said Bill Lawson, executive director of the Mahoning Valley Historical Society. “They had opened the plant in 1966. They added a van assembly plant in the 1970s, and a metal fabricating plant after that.

“So just as the dust was starting to settle … you had 12,000 people employed in the Lordstown complex at General Motors. General Motors took on an even greater significance in the local economy,” Lawson said. “I think it’s critical that the plant was there and employing that many people.”

Employment at the plant has dropped since its peak in the 1980s – two years ago, there were about 4,500 workers there. Now, after two shift layoffs, there are about 1,500.

Through it all, the Valley has maintained a sense of pride in the Lordstown complex and the vehicles it produces, from the Impala to the Chevy Cavalier to the Cruze, which the plant started producing in 2010.

“Any time a community has an employer that large that creates products sold throughout the country and even across country boundaries, people identify with that product,” said Lawson. “You see that definitely in terms of brand loyalty for General Motors – not just the autoworkers and their families because of the discounts, but I think other people have bought GM because they considered it an important part of our economy.”

The shutdown of the plant, then, will have an impact beyond job and revenue losses.

“It will affect Trumbull County’s budget quite a bit – and yes, it’s going to have a very negative impact on our perception of ourself and our self-worth, much as [the collapse of the steel industry] did 35 years ago,” Lawson said.

INDIRECT IMPACT

The economic losses, too, will be significant, economists say.

Experts note that beyond the estimated 1,600 workers expected to be impacted at the plant and other local companies GM contracts with, the effect of the shutdown will ripple across other companies in the plant’s supply chain, into other industries and to communities beyond the Valley.

“The main concern is, beyond the 1,600 or so good-paying jobs that will potentially be lost at General Motors Lordstown, are the indirect jobs that will be affected,” said A.J. Sumell, an economics professor at Youngstown State University. “It’s what, in economics, we call the multiplier effect.”

So, how large is that multiplier?

“It’s particularly large with an employer like a car manufacturer, because you don’t have just the indirect jobs in the service industry, like restaurants and hotels and those businesses where the employees at GM Lordstown would have been spending money,” Sumell said. “There’s a greater impact because of all the jobs that are directly dependent on GM Lordstown – the suppliers of GM Lordstown.”

OTHER COMPANIES

Locally, there are several companies that are directly tied to the plant. Lordstown Seating Systems, which makes seats for the Cruze, reported it would lay off 83 employees earlier this year after GM announced it was cutting the Lordstown plant’s second shift.

A company representative declined to comment Friday on the impact of the plant halting production next year.

Jamestown Industries, which supplies the plant with front and rear bumper covers for the Cruze from its plant in Youngstown, said last week that recent attempts at diversification put the company in a better position to weather the idling of the plant.

“In 2015, we started the process to diversify to insulate ourselves from some of the variability that’s in the automotive industry,” said Lawrence Long, vice president of development for Jamestown. “So while there is uncertainty with regard to the Lordstown plant, we are confident that we will make it through this tough time.”

As for potential layoffs at Jamestown’s Youngstown plant, Long said, “We don’t know for sure how it will impact our workforce. We’re working hard to make sure we keep our workforce intact.”

Jose Arroyo, United Steelworkers business representative for this area, was not as optimistic about the future of Comprehensive Logistics/Source Providers in Austintown, which does logistics and warehousing for GM Lordstown.

With the previous layoffs at the plant, Source Providers laid off more than 350 people, Arroyo said; about 180 employees remain.

“Obviously, the prospects aren’t good, considering GM is Comprehensive Logistics’ only customer,” said Arroyo. “As General Motors goes, so goes Comprehensive Logistics [and subsidiaries] Source Providers and Falcon Transport. We’re extremely concerned, and we’re waiting to hear more from the company.”

Arroyo is also hearing concern from other companies whose workers he represents, such as aluminum and steel companies.

“Everybody is kind of holding their breath right now and hoping the talks with General Motors will end up in a new vehicle or retooling of the plant,” he said.

BUSINESS IMPACT

The impact will be felt by small businesses with less direct, but still significant, ties to the plant.

Our Place Diner in Lordstown is owned and operated by a family with deep GM Lordstown ties.

“My dad retired from GM after 30 years. My brother was laid off with the second shift. My husband was laid off with the third shift,” said Jackie Woodward, whose father owns the diner. “We are just like everybody in this town.”

The impact of the plant on their family’s business is significant.

“A lot of the business in this town relies on the traffic from General Motors and the companies that supply General Motors,” Woodward said. “There are not a lot of people who live in this town. So every business in this town relies on this.”

As for what the future holds for Our Place Diner, Woodward said they are taking it one day at a time and holding out hope.

“We have employees who rely on us. There are customers that won’t be impacted by GM, and you hope to stay open for everybody that needs a place to stop and eat,” she said.

As for how this ripple across the local economy will play out, Sumell said it will take years for the full effect to be realized. And as for what that impact will be, he cited research indicating that lost manufacturing jobs result in other job losses.

“Studies on similar situations have suggested that about three additional jobs [for every lost manufacturing job] would be lost over the course of years – which would put the total in the range of 7,000 or 8,000 jobs lost,” he said.

As a percentage of the Valley’s total workforce of about 220,000, that is fairly significant, he said – and he noted that it would accelerate a long-running trend of the Valley’s employment declining each year.

SILVER LINING?

The good news is that the Valley’s economy is more diversified today than it was back in the 1970s when the steel industry went under – and that trend likely will continue.

“We are much more diversified, which is an outcome of a sad situation – but it’s almost a silver lining of a sad situation,” Sumell said. “Because we’ve lost so many jobs in manufacturing already, we have a relative increase in jobs outside of manufacturing, which are generally less susceptible to massive layoffs.”

In the future, it’s more likely that employment will be spread across a variety of companies – for example, a brand-new, state-of-the-art energy center in Lordstown that cost $1 billion to build employs about 20 people, who earn good wages.

“We’ve become so much more automated, within manufacturing, that there is no single, dominant employer or single, dominant industry in most cities,” Sumell said. “The silver lining to that is, if you have [that] instead of just one dominant employer, or one dominant industry in a city, you have, naturally, a more diversified economy.”

He added: “We are in a better position, today, to deal with this type of blow than we were 40 years ago.”

Who that might not benefit is the GM Lordstown workers who are facing layoffs and an uncertain future. For many, it will be a question of retirement or moving or investing time and money into training for a new career. As Sumell notes, that’s often easier said than done.

But if there is any upshot, it may be that the Valley’s past economic woes have prepared it for this moment.

“We have been dealing with economic devastation for the past 40 years in this area,” Sumell said. “There is a sense of resiliency that is naturally built into our fabric in this community. So I’m confident we will be able to not just survive as a community, but to grow and to become a stronger community in the future.”

Continue reading Impact of GM Lordstown Shutdown Will Be Felt for Many Years

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Bernie Sanders on Keeping Jobs: Carrier Just Showed Corporations How to Beat Donald Trump

We need a president who can stand up to big corporations, not fold to their demands.

By Bernie Sanders

Washington Post

December 1, 2016 – Today, about 1,000 Carrier workers and their families should be rejoicing. But the rest of our nation’s workers should be very nervous.

President-elect Donald Trump will reportedly announce a deal with United Technologies, the corporation that owns Carrier, that keeps less than 1,000 of the 2100 jobs in America that were previously scheduled to be transferred to Mexico. Let’s be clear: It is not good enough to save some of these jobs. Trump made a promise that he would save all of these jobs, and we cannot rest until an ironclad contract is signed to ensure that all of these workers are able to continue working in Indiana without having their pay or benefits slashed.

In exchange for allowing United Technologies to continue to offshore more than 1,000 jobs, Trump will reportedly give the company tax and regulatory favors that the corporation has sought. Just a short few months ago, Trump was pledging to force United Technologies to “pay a damn tax.” He was insisting on very steep tariffs for companies like Carrier that left the United States and wanted to sell their foreign-made products back in the United States. Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How’s that for standing up to corporate greed? How’s that for punishing corporations that shut down in the United States and move abroad?

In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.

Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives. Even corporations that weren’t thinking of offshoring jobs will most probably be re-evaluating their stance this morning. And who would pay for the high cost for tax cuts that go to the richest businessmen in America? The working class of America.

Let’s be clear. United Technologies is not going broke. Last year, it made a profit of $7.6 billion and received more than $6 billion in defense contracts. It has also received more than $50 million from the Export-Import Bank and very generous tax breaks. In 2014, United Technologies gave its former chief executive Louis Chenevert a golden parachute worth more than $172 million. Last year, the company’s five highest-paid executives made more than $50 million. The firm also spent $12 billion to inflate its stock price instead of using that money to invest in new plants and workers.

Does that sound like a company that deserves more corporate welfare from our government? Trump’s Band-Aid solution is only making the problem of wealth inequality in America even worse.

I said I would work with Trump if he was serious about the promises he made to members of the working class. But after running a campaign pledging to be tough on corporate America, Trump has hypocritically decided to do the exact opposite. He wants to treat corporate irresponsibility with kid gloves. The problem with our rigged economy is not that our policies have been too tough on corporations; it’s that we haven’t been tough enough.

We need to re-instill an ethic of corporate patriotism. We need to send a very loud and clear message to corporate America: The era of outsourcing is over. Instead of offshoring jobs, the time has come for you to start bringing good-paying jobs back to America.

If United Technologies or any other company wants to keep outsourcing decent-paying American jobs, those companies must pay an outsourcing tax equal to the amount of money it expects to save by moving factories to Mexico or other low-wage countries.  They should not receive federal contracts or other forms of corporate welfare.  They must pay back all of the tax breaks and other corporate welfare they have received from the federal government. And they must not be allowed to reward their executives with stock options, bonuses or golden parachutes for outsourcing jobs to low-wage countries. I will soon be introducing the Outsourcing Prevention Act, which will address exactly that.

If Donald Trump won’t stand up for America’s working class, we must.

Beaver County NAACP Prepares Black Workers for Employment at Proposed Shell plant

 

Old Horsehead Zinc, site of new Shell ‘Cracker’

By Jared Stonesifer

Beaver County Times

March 10, 2016 – MIDLAND — The Beaver County chapter of the NAACP wants to make sure the local black population isn’t left out of a potential economic explosion that would occur if Shell Chemicals builds a multibillion-dollar ethane cracker plant along the Ohio River.

The chapter is holding an event next week designed to prepare the local population for that possibility. The meeting will inform residents on what skills and qualifications they would need to be hired at the potential plant, while it will also inform them about the possibility of an array of opportunities if the plant comes here.

Shell, which continues work to remediate the old Horsehead Corp. site in Potter Township, has not made a final investment decision on the plant. But that hasn’t stopped local leaders from preparing in the event it does come here.

“There could be an (economic) explosion coming, and we want to make sure African-Americans are part of that explosion,” said Willie Sallis, president of the Beaver County NAACP.

The meeting will be held 5 p.m. Thursday at the American Legion at 800 Midland Ave. in Midland.

It will include representatives from Community College of Beaver County, Shell, Job Training for Beaver County, CareerLink and potentially a local politician, according to the NAACP.

Future meetings could be scheduled in other Beaver County locations in an attempt to galvanize as much of the population as possible.

Continue reading Beaver County NAACP Prepares Black Workers for Employment at Proposed Shell plant

Public Works: How The Clinton and Sanders Infrastructure Plans Measure Up

By Dave Johnson

Campaign for America’s Future

“Investing in infrastructure makes our economy more productive and competitive across the board.”
– Hillary Clinton

Dec 1, 2015 – Democratic presidential candidate Hillary Clinton has announced a plan for infrastructure investment. How does her plan stack up against that of her chief competitor, Bernie Sanders?

Also, how will Clinton and Sanders pay for their plans? On that question, Sen. Elizabeth Warren (D-Mass.) recently came up with a set of principles we can use to judge this.

Clinton’s Infrastructure Plan

Clinton on Monday announced a plan for investing in infrastructure improvements. Meteor Blades laid out the need for infrastructure investment at Daily Kos in “Clinton proposes $275 billion spending for infrastructure“:

… 11 percent of the nation’s bridges are structurally deficient and a fourth of them are functionally obsolete. Similar deficiencies can be found in schools, dams, levees, railroads, the electrical grid, and wastewater facilities. In its 2013 quadrennial report card on U.S. infrastructure, the American Society of Civil Engineers said the nation would need to invest an additional $1.6 trillion by 2020 to put its infrastructure into good repair. And that doesn’t include innovative infrastructure like universal broadband.

Clinton’s infrastructure plan is detailed at her website in “Hillary Clinton’s Infrastructure Plan: Building Tomorrow’s Economy Today.” Here is a distillation:

● $250 billion dollars in infrastructure investment, spread out over five years as additional spending of $50 billion each year.

● An additional one-time $25 billion to seed a national infrastructure bank. The bank will support up to an additional $225 billion in direct loans, loan guarantees, and other forms of credit enhancement. These are loans to states and cities which will require tolls, fees, etc. to pay off.

● Spending priorities include “smart investments in ports, airports, roads, and waterways”; “giving all American households access to world-class broadband and creating connected ‘smart cities’”; “building airports and air traffic control systems”; “a smart, resilient electrical grid”; “safe and reliable sources of water”; “a national freight investment program”; “upgrade our dams and levees to improve safety and generate clean energy”; safe, smart roads and highways that are ready for the connected cars of tomorrow” and “the new energy sources that will power them.”

● A promise of “a faster, safer, and higher capacity passenger rail system.” But the plan does not mention high-speed rail. (Note that a single high-speed rail system from Los Angeles to San Francisco is expected to cost up to $60 billion, which alone is almost one-fourth of Clinton’s entire five-year infrastructure investment for all infrastructure needs.)

Sanders’ Infrastructure Plan

Clinton’s $275 billion infrastructure plan offers modest spending and contains few specifics. Contrast that with candidate Bernie Sanders, who has proposed a highly detailed, $1 trillion plan.

Continue reading Public Works: How The Clinton and Sanders Infrastructure Plans Measure Up

Five Ways Wall Street Continues to Screw Up the Economy for the Rest of Us and How to Fix It

By Robert Kuttner

Beaver County Blue via Huffington Post

July 2, 2014 – The shocking thing about the financial collapse of 2008 is not that Wall Street excesses pushed us into the worst economy crisis since the Depression. It’s that the same financial system has been propped back up and that elites are getting richer than ever, while the effects of that collapse are continuing to sandbag the rest of the economy. Oh, and most of this aftermath happened while a Democrat was in the White House.

Consider:

  • The biggest banks are bigger and more concentrated than ever.
  • Subprime (subprime!) is making a comeback [2] with interest rates of 8 to 13 percent.
  • Despite Michael Lewis’s devastating expose of how high speed trading is nothing but a technological scam that allows insiders to profit at the expense of small investors, regulators are not moving to abolish it [3].
  • The usual suspects are declaring the housing crisis over, even though default and foreclosure rates in the hardest hit cities and states are upwards of 25 percent.
  • The deficit is falling, now just 2.8 percent of GDP [4], thanks to massive cuts in social spending. Isn’t that reassuring?

Meanwhile, back in the real economy, good jobs are far too scarce, incomes are stagnant, while 95 percent of the gains go to the top one percent.

Continue reading Five Ways Wall Street Continues to Screw Up the Economy for the Rest of Us and How to Fix It

Income Gap Widens as American Factories Shut Down: the Case of Reading, PA

Beaver County Blue via AP

June 15, 2014 – READING PA – In August 2008, factory workers David and Barbara Ludwig treated themselves to new cars – David a Dodge pickup, Barbara a sporty Mazda 3. With David making $22 an hour and Barbara $19, they could easily afford the payments.

A month later, Baldwin Hardware, a unit of Stanley Black & Decker Corp., announced layoffs at the Reading plant where they both worked. David was unemployed for 20 months before finding a janitor job that paid $10 an hour, less than half his previous wage. Barbara hung on, but she, too, lost her shipping-dock job of 26 years as Black & Decker shifted production to Mexico. Now she cleans houses for $10 an hour while looking for something permanent.

They still have the cars. The other trappings of their middle-class lifestyle? In the rear-view mirror.

The downfall of manufacturing in the United States has done more than displace workers and leave communities searching for ways to rebuild devastated economies. In Reading and other American factory towns, manufacturing’s decline is a key factor in the widening income gap between the rich and everyone else, as people like the Ludwigs have been forced into far lower-paying work.

It’s not that there’s a lack of jobs, but gains often come at either the highest end of the wage spectrum – or the lowest.

“A loss of manufacturing has contributed to the decline of the middle class,” said Howard Wial, an economist with the Brookings Institution and the University of Illinois at Chicago. “People who are displaced from high-paying manufacturing jobs spend a long time unemployed, and when they take other jobs, those jobs generally pay substantially less.”

Continue reading Income Gap Widens as American Factories Shut Down: the Case of Reading, PA

Ohio: Lorain Workers Rally to Save Our Steel Jobs

USW News

Yesterday, in Lorain Ohio, hundreds of workers and supporters joined U.S. Senator Sherrod Brown, and Rep. Marcy Kaptur to tell America that we need to Save Our Steel jobs.

The Alliance for American Manufacturing (AAM) is bringing the issue of a surge of illegally dumped oil tubular goods (OCTG) imports, primarily from South Korea, is flooding the U.S. market. These foreign steel pipes are priced below fair value and in deceptive ways are designed to circumvent international trade laws.

U.S. workers and their communities deserve a fair shot. The United States has trade remedy laws that serve as the last line of defense for American firms and workers in the face of illegal trade. But when the rules are not effectively enforced, U.S. producers lose sales and profits, workers lose their jobs and communities lose homeowners and a sustainable tax base.

Watch for future planned rallies and join us in Granite City, IL; McKeesport, PA; Longview, TX; Fairfield, AL and in the iron range in Minnesota.