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GM, state, UAW celebrate automaker's investment of $350 million in assembly plant to build small car
By Jim Mackinnon
Beacon Journal business writer
Published on Friday, Aug 22, 2008
LORDSTOWN: The state of Ohio provided $84.1 million in incentives to persuade General Motors to invest $350 million in the Lordstown assembly plant to build the new Chevrolet Cruze small car starting in 2010.
On Thursday, the state's highest-ranking elected officials, the chief executive of General Motors, top union officials and other VIPs gathered in Lordstown to celebrate that investment and its impact on the struggling Mahoning Valley. They also provided the plant's workers a peek at GM's next generation small car that they soon will be building.
Now the state is willing to double the amount of Lordstown incentives to more than $168 million to get GM to invest in an as-yet undisclosed project somewhere in Ohio, Lt. Gov. Lee Fisher said.
Fisher, who also heads the Ohio Department of Development, facetiously told GM CEO Rick Wagoner
before a crowd of hundreds inside the assembly plant that Wagoner had until 5 p.m. (Thursday) to accept the offer.
Afterward, Fisher said he is serious about talking with General Motors and would grant Wagoner a time extension on accepting the state's incentives proposal. He said he and Gov. Ted Strickland travel to Detroit every three months to talk with the nation's top automotive industry executives.
''We are in discussions with General Motors about the possibility of bringing a new product to the state of Ohio,'' Fisher said. ''It's a multi-state competition. I'm not permitted, on penalty of death, to say anything more.''
There is no pending announcement related to the state's latest attempt to woo GM, a department of development spokeswoman said.
The primary focus Thursday was on Lordstown and how GM's new investment in the massive plant, which presently makes the small-car Chevrolet Cobalt and related Pontiac G5, will breathe new life into the local economy.
''Unbelievable. It's going to save the Mahoning Valley,'' said Lois Malaska, a United Auto Workers member who has been at the Lordstown plant for nearly 30 years.
She was among numerous people who wanted to scrutinize the light blue-gray Cruze full-size mockup model perched on a stage on the assembly plant floor.
''I love it, the look,'' Malaska said. ''It looks like it's going 90 miles per hour just sitting there.''
The Cruze, which will replace the Cobalt, shares its design with the Opel Astra and Saab 9-3. It is part of a GM plan to use common parts and engineering for models sold around the world. Production in the Cruze compact-car segment will increase 17 percent to 2.1 million by 2011, the firm Global Insight said.
The Lordstown plant, which opened in 1966, has made other small cars for General Motors, including the Vega in the 1970s. GM just added a third shift at Lordstown to build more Cobalts and Pontiac G5s. With the added shift, the 5-million-square-foot complex now has 5,000 employees — 4,600 hourly and 400 salaried.
GM, Ford and Chrysler are working quickly to shift production from what had been bread-and-butter large pickups and SUVs to more fuel-friendly vehicles as gas prices nationwide have surged above $4 a gallon.
The shift toward fuel-saving models has been swifter this year than during previous oil shocks, because consumers see the price increase as more permanent, said Alan Baum, an auto analyst at the Planning Edge in Birmingham, Mich.
Some automotive industry analysts have wondered if the shift in production to smaller cars is an overreaction to the high gas prices, which have begun to drop recently.
General Motors is investing about $500 million total in Cruze production.
U.S. Rep. Tim Ryan, D-Niles, said the $350 million that will go into the Lordstown plant will help revitalize the area. Trumbull County, where the Lordstown plant is located, had an 8.2 percent unemployment rate in July, while neighboring Mahoning County had a 7.8 percent rate — both above the Ohio average of 7.2 percent for the month.
''Today is the day the Mahoning Valley turned the corner,'' Ryan said.
George Ramey, a UAW member who is one of about 1,400 people on the new third shift, said he thinks the Cruze looks like a great vehicle and is glad GM decided to build it where he lives.
''I'm glad they believe in us and believed in the Mahoning Valley,'' the 38-year-old said.
Another UAW member, Robert Trafton, transferred to Lordstown earlier this year from a GM plant in Missouri. He also will work the third shift.
''I think it's beautiful,'' Trafton said as looked at the Cruze. ''It's going to be a success.''
Trafton, who is 43 and originally from Baltimore, said Lordstown is the fourth GM plant where he has worked. He thinks he now has a longer future in the Ohio factory.
''This is it,'' Trafton said. ''I'm going to retire from here.
Bloomberg News contributed to this story.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
LORDSTOWN: The state of Ohio provided $84.1 million in incentives to persuade General Motors to invest $350 million in the Lordstown assembly plant to build the new Chevrolet Cruze small car starting in 2010.
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