Company News

Auto Unions Apprehensive About 2019

YOUNGSTOWN, Ohio – Those unions that represent hourly wage earners in the automotive manufacturing sector are filled with apprehension and uncertainty, especially in the wake of plans by General Motors Co. to shut down its Lordstown complex in March, leaving about 1,500 workers unemployed.

The ripple effect is also being felt at GM’s suppliers, including Aptiv LLC, formerly Delphi Automotive in Warren, which makes cables and metal stamping terminals used on automotive wiring.

“This year looks like it might be a tough year all around in the auto industry,” says Brian Lutz, shop chairman of Local 717 of the IUE-CWA. The union represents 591 hourly workers at Aptiv plants in Warren and Vienna.

Demand across the automotive sector is expected to sink this year, he says, and Aptiv is starting to align its production with an expected downturn in the automotive sector. “We’re looking at some temporary layoffs here,” Lutz says.

More than half of the company’s business is done with GM, but it also has sizeable contracts with Honda, Toyota, Ford and Chrysler.

Analysts expect new-vehicle sales in North America to dip by about 1% across the board this year. According to the National Automobile Dealers Association, sales of new cars and trucks are projected to drop to 16.8 million units in 2019 compared to 17.2 million new vehicles sold in 2018.

Just how many employees at Aptiv would be affected is as yet undetermined, but Lutz emphasizes that the layoffs are not permanent. Recently, 23 employees accepted an early retirement package the company offered. “We’re working to alleviate the layoffs as much as we can,” he says.

Lutz says that the retirement package was offered to trim hourly employment and make room for a major investment at the Aptiv North River Road metals-stamping plant.

“We’ll be receiving 17 new, high-speed metal-stamping presses,” he says. These would replace the 37 presses now operating inside the plant. “As soon as the presses come in, it will be an 18-month project,” which includes installing the new equipment and training operators, he says.

“There’ll be different activities in their classifications,” Lutz says of the new training. “They might be losing some responsibilities but gaining others.”

Lutz sees this investment as the first step in the move by the company toward winning new business in other automotive market segments, such as autonomous vehicles. Long-term this could serve as a great benefit for Local 717.

“Their intention is to use us as a building block, so we have to make this work,” Lutz says. “Then, the plant will definitely be in line for new investments. That’s the incentive at the end of the day.”

Aptiv was once Delphi Packard Electrical Systems and a subsidiary of General Motors. During the early 1990s, the North River Road complex and other satellite plants across the Mahoning Valley employed nearly 15,000 workers. Since the late 1970s, however, the company began shipping production work to Mexico and by the late 1990s had opened a new production plant in China.

In 2005, Delphi declared bankruptcy on its North American operations and presented employees with incentives of between $35,000 and $140,000 to leave the company. The workforce was whittled to less than 1,000 in Warren once the buyouts were completed.

A similar pattern has followed the GM Lordstown plant. Like Delphi, GM Lordstown boasted a workforce of nearly 15,000 during the early 1990s, big enough for the union to have two locals to represent hourly workers there. Local 1112 of the United Auto Workers represented workers in the assembly plant while Local 1714 covered workers in the metals-stamping plant.

Last year, the two unions combined under Local 1112, just as GM started to scale back production of the Chevrolet Cruze and announced its decision to eliminate the third shift at the complex.

“We’re really struggling with this right now,” says David Green, president of Local 1112.

In November, GM announced that it would cease production of the Lordstown-built Cruze and place the plant on “unallocated” status – meaning the company has not awarded a new product for the plant. GM also announced it would close its Hamtramck Assembly plant near Detroit, its Oshawa plant in Ontario, Canada, and two other transmission plants in Baltimore and Warren, Mich.

In early 2017, GM announced it would cancel the third shift at Lordstown, eliminating about 1,500 jobs. Elimination of the second shift followed last July, affecting another 1,500 positions. That left a single shift working at the plant, and another 1,500 will lose their jobs in March.

Green says the international is taking the lead on the union bargaining sessions, which should begin in earnest in the coming months. The UAW contract expires in September.

“Our members don’t know what the future holds,” Green says. “We’re keeping up hope and faith that GM will come to a decision that is positive for the plant and our community.”

Suppliers who are union signatories will also feel the brunt of the shutdown. Lordstown Seating Systems, which manufactures seats for the Cruze, will idle production once the plant closes and lay off 120 members of Local 1112.

Source Providers Inc., a division of Comprehensive Logistics, is preparing to shut down its plant on Victoria Road in Austintown in the wake of the Lordstown closure. The company performs sequencing and light assembly for the Chevrolet Cruze and employs about 180 hourly workers affiliated with the United Steelworkers union.

In a letter addressed to President Donald Trump Feb. 1, Green said the closing of the Lordstown plant could affect as many as 40,000 jobs across Ohio when suppliers, services, transportation and other ancillary positions are factored in. Green was the personal guest of U.S. Rep. Tim Ryan, D-13 Ohio, at Trump’s State of the Union address Feb. 5.

“While this may not seem important to you,” Green wrote the president, “it will have a devastating impact on many families, businesses, and communities, especially here in the Mahoning Valley, a place that I call home.”

Copyright 2020 The Business Journal, Youngstown, Ohio.