A decade ago, many critics faulted General Motors for failing to make the necessary, and difficult, strategic decisions. They did so as American taxpayers put up more than $50 billion to rescue the automaker. Now a much stronger GM is seeking to get ahead of the industry curve, a future of electric and autonomous vehicles, and the criticism again is sharp as the company moves to close the Lordstown assembly plant in Trumbull County, plus four others in Michigan, Maryland and Ontario.
Add the reduction in salaried employees, and the total number of jobs lost is roughly 14,700.
The news has been devastating to workers and their families, plus surrounding communities. And yet the company sees itself taking steps to improve its competitiveness, or to ensure its place as an automaker and employer.
What frustrates from the perspective of this part of Ohio is the absence of an adequate explanation for why Lordstown doesn’t fit into the company’s plans. The plant is relatively new, retooled to build the Chevy Cruze. The UAW and public officials long have shown a willingness to work constructively with the company.
If sales of the Cruze have slumped, car buyers preferring larger SUVs and light trucks, why not revamp the plant to assemble another product? Both of the state’s U.S. senators, Sherrod Brown, a Cleveland Democrat, and Rob Portman, a Cincinnati Republican, have pursued this possibility with GM executives. Their efforts go back to the elimination of the third and second shifts, the latter in April. Tim Ryan, who represents this area in the U.S. House, also has pressed the matter.
The company appears to argue the expense of retooling would be too great, the plant set up for the less popular smaller car. Yet Portman made a telling point during an interview on CNBC this week. He noted GM is looking at 20 new electric vehicles during the next five years or so. He added: “One of those cars certainly will be small enough to fit into the same frame we now have for the Cruze.”
Both senators have voiced frustration with the GM decision in the wake of a Republican tax cut bill that was sold as a spur to invest. On CNBC, Portman pointed to the generous expensing provisions for capital investment. Brown cited that tool in an April letter to Mary Barra, the GM chief executive. He also has stressed the potential windfall from the steep lowering of the corporate tax rate.
If there are trade reasons to resist Brown’s call for a temporary $3,500 rebate on the purchase of an American-made car, the GM closures help make a case for the other provision of his American Cars, American Jobs Act — making the tax code less conducive to taking such work overseas.
Both Brown and Portman cite how President Trump missed the mark, and not in his laughable claim that Brown hasn’t been strong enough in his support for workers. The president threatened to withhold from GM subsidies for electric vehicles. The company already is near tapping out its limited share.
As it is, General Motors currently is pushing for passage of legislation to regulate the advance of autonomous vehicles. A range of safety advocates warns the AV START Act is wholly inadequate in ensuring the vehicles operate safely. Perhaps the legislation is a vehicle for reminding GM about how it has benefited from Lordstown and surroundings, and why they belong in its future.