GM Lordstown Reels as Sales Slump Costs 1,200 Jobs

LORDSTOWN, Ohio – There have been layoffs of this magnitude at the Lordstown Assembly before, but it’s been a long time. Glenn Johnson, president of UAW Local 1112, knows that well enough.

In 1980, he lost his job as General Motors’ sales stagnated and workers were laid off. He was out of work for 14 months then. Some workers were unemployed for 17 months. GM announced Wednesday that some come Jan. 23, 1,250 hourly and salaried employees will lose their jobs at the home of the Chevrolet Cruze.

The announcements and memberships meetings that followed never is easy for anyone involved. In the break rooms at the Lordstown Assembly, where meetings for UAW members were held Wednesday morning and afternoon, there were plenty of tears and plenty of questions.

“It’s hard for our members today. There are people who have never known any other way in life except going to General Motors and working every day,” Johnson said at a press conference following GM’s announcement. “If you’ve been following the market, you can see the shift, but I didn’t expect it this quick. Expeditiously, I guess, would be the right word. We’re going to work through it to make sure that everything they have allotted to them is carried out.”

Robert Morales, president of UAW Local 1714, added “This is their lives, their livelihood. They have families. They have kids. They have house payments and car payments. When you’ve been somewhere for such a long time and don’t have a job, I think what gets to them is the fact that there’s no return to work date. We don’t know how long it’ll be.”

The workers laid off from GM Lordstown will be determined by seniority, Morales and Johnson said. Layoffs are indefinite, although attrition of workers could result in some employees being recalled.

The layoffs result from slumping small car sales across the board, not just for the Cruze or GM. With gas prices sticking around the $2 mark and consumers once again having money to spend on more expensive, larger vehicles following the Great Recession, sales are turning back to trucks and SUVs.

Last month, the Cruze posted its third consecutive month of year-over-year sales gains, but year-to-date sales are down nearly 20% from 2015, according to GM’s monthly sales report issued Nov. 1. During the first generation of the Cruze, monthly sales were generally around 20,000 cars per month. Since the introduction of the second generation early last year, that number has dropped to about 17,000.

“It is simply because there is a shift in the buying public’s options for vehicles,” Johnson said. “There’s a shift to buy bigger vehicles that are as fuel-efficient as some of the cars we had a decade ago.”

UAW leaders and GM management met last week to review scheduling for 2017 and the union team was notified Monday of the decision. Meetings were held at 7 a.m. and 3 p.m. for union members to inform them, with the second meeting recorded to be shown to the third shift workers.

“Our concern is our membership and the ones who will be losing their jobs. We’ll make sure we get the information out to them to help them get through this. In the meantime, it’s business as normal at the complex,” Morales said. “The hard work of the workers at this complex has paid off. … It has nothing to do with our ability to make a car. We want to stress that to our membership and the community, that their hard work is being recognized by the corporation and the UAW.”

Last month, Consumer Reports named the Cruze as one of the most reliable cars on the market and over the summer the plant began planning improvements to its process to move up to the top level of GM’s “built in quality” level.

The daily production goal for the Lordstown Assembly is roughly 1,260, Johnson and Morales said. With the number of workers at the plant cut by a third, that number is most likely to drop. Earlier in the year, Chevrolet announced that its Ramos Arizpe plant in Mexico would produce some Cruzes for the U.S. market to keep up with demand. Some of that work has since returned to Lordstown and, when the layoffs go into effect Jan. 23, all Cruzes sold in the U.S. will once again be made in the Mahoning Valley.

It’s not yet known exactly where in the plant the layoffs will come from, the UAW Local presidents said, although standard UAW-GM rules regarding layoffs will be followed. Some workers may be moved within the plant, Morales noted.

“It’ll be a transition for sure. We’ve seen the mass exodus of members before, either by attrition or through transferring to other locations,” he said. “People at the plant will take different positions and there’s a training process involved. We like to think people are skilled at their job and do it well day in and day out. There will be movement, hopefully not a lot of it.”

The impact of the job cuts will affect more than just the UAW employees, Johnson continued. A ripple effect will continue down the supply chain and into the community.
“Truck drivers and logistics and suppliers and everyone else, the ripple effect is going to go to restaurants, taverns, movie theaters,” he said. “If I’m anywhere near that line, I’m on lockdown mode. I’m making as much money as I can and saving as much money as I can. That travels through the whole sector.”

One of the silver linings, Johnson said, is that GM, along with the other American automakers, is pulling away from commercial sales and focusing instead on retail sales.
“That’s where we make as much money as we can on small cars. GM has pulled out of the fleet business because it was hurting them in the long run,” he said. “I think that’s a plus. Unfortunately, we’re going to have to do it with less workers.”

In the meantime, there isn’t much to be done at Lordstown except focus on the next car on the line and keep the plant moving forward.

“No matter what we do, we have to make sure that we implement the General Motors manufacturing system, known as GMS, and achieve our [built in quality] levels to put ourselves in the best position for whatever comes down the road,” Johnson said, “Whether it’s more Cruze production, another product or a new product announcement. It’s critical to position ourselves so that when the play is run, we’re there to pick it up and go.”

Copyright 2024 The Business Journal, Youngstown, Ohio.