Portman ‘Disappointed’ After ‘Tough Meeting’ with GM CEO
YOUNGSTOWN, Ohio – General Motors CEO Mary Barra declined to make a public commitment to reinvest at the GM plant in Lordstown, U.S. Sen. Rob Portman said following what he characterized as a “tough meeting” with the auto executive Tuesday afternoon.
During a phone interview following his meeting with Barra, Portman, R-Ohio, said he was hopeful that he could convince GM to invest in the plant and bring in a new product. The plant and its workers had proven themselves and community support for the plant is unquestioned.
“We had a very frank discussion and the public commitment I was pushing her to make, she was not wiling to make,” he said.
The senator pointed to incentives in the tax bill passed last year “for precisely that kind of investment,” and noted manufacturing optimism is at an all-time high. Businesses are taking actions based on of the ability to write off investments at 100% immediately and lower tax rates.
“The problem is the car market is almost at odds with the overall business cycle,” he said. “Two years ago and last year were very good for cars, not so good for everybody else.”
This year the car market is soft and manufacturers are seeing increased costs because of steel tariffs put in place by the Trump administration.
The Lordstown plant is down to a single shift following the layoff of approximately 1,500 workers this summer amid declining sales for the Chevrolet Cruze. Once a top seller for GM, the market for the Cruze has softened as lower gas prices drive demand for trucks and sport utility vehicles.
Earlier this month, the U.S. Department of Labor awarded a National Dislocated Worker Grant of up to $1.75 million, with an initial award of $875,000, to provide employment and training services of workers affected by the GM layoffs. Portman, with U.S. Sen. Sherrod Brown, D-Ohio, and U.S. Rep. Tim Ryan, D-13 Ohio, supported the grant.
“That’s positive but that’s not a long-term solution,” Portman said. “We want auto workers. People want to work at that plant, not be retrained for something else.
“We need to impress upon [GM] the importance of this plant and this workforce and this community, all of which have been great for GM,” he said.
Portman said he saw a “glimmer of hope” for Lordstown because of a combination of Ford Motor Co.’s decision to get out of the small car business, potentially opening up the market for a vehicle like the Cruze, and motorists migrating back to small cars because of the prospect of higher gas prices.
“She was not holding out a lot of hope on that because she doesn’t necessarily think those things are happening,” Portman said. The shift to SUVs and compact SUVs is likely to continue. Also, GM has capacity at plants elsewhere and the cost to retool the Lordstown plant for a new product would be high.
The meeting was “kind of discouraging, to be honest,” Portman said. “On the other hand, I’m glad we delved into the details. We need to know what we’re facing and what the options are.”
This summer, Brown also met with Barra to discuss the Lordstown plant following the layoff of the second shift at Lordstown and the announcement that GM would build its new Chevrolet Blazer at a plant in Mexico. During that meeting, Barra also cited the expense of retooling the Lordstown plant and similarly declined to make a commitment to the complex.
Last year, wages totaled $250 million at the plant, according to GM’s website.
Copyright 2019 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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