New car comes to Lordstown
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
LORDSTOWN -- The waiting is over, and this time, the news is good.
General Motors has decided to invest more than $500 million to bring its new generation small car to the Lordstown Assembly Plant.
The automaker's decision, announced Tuesday to GM employees working the second shift, will likely secure the future of the Mahoning Valley's largest employer.
GM's new small car, to be introduced for the 2005 model year, will replace its Chevrolet Cavalier and Pontiac Sunfire, both made at the Lordstown facility.
Workers were told first
Company and union officials, speaking from a Niles restaurant, reportedly announced the decision to plant employees by closed circuit television around 9 p.m. Tuesday, and more announcements were planned overnight and today.
Dan Flores, a GM spokesman in Detroit, said the company's general policy is always to notify its employees of major decisions first.
Gov. Bob Taft, U.S. Sen. George Voinovich and other dignitaries are expected to join GM and United Auto Workers officials for the announcement, which is set for 10 a.m. Thursday, probably at the plant.
John Mohan, shop chairman of UAW Local 1112, which represents the assembly plant workers, said he would not give details of the plan or comment until after that press conference. Maureen Midgley, Lordstown assembly plant manager, also declined to comment.
Investing in the plant
Workers at the plant Tuesday learned that the company intends to invest about $500 million in plant remodeling and upgrades, including the rebuilding of the paint and body shop.
Plans are to complete the massive renovation in 2004, in time to start making the new small car line for 2005.
Trumbull County Commissioner James G. Tsagaris said he heard from Jim Graham, Local 1112 president, earlier Tuesday that an announcement would be made to employees later that day that the plant had been selected to build a new car.
"They worked so hard for it," Tsagaris said. "They deserve it. The workers are the ones who worked so hard to get it -- they along with management."
GM has also talked about spending $230 million to upgrade its adjacent fabrication plant, but it is not clear whether that project is also going forward now. The fabrication plant supplies the assembly plant and employs about 2,400 hourly workers.
GM officials have said the remodeled assembly plant will probably need fewer workers than it does now because of increased automation and better engineering of the car. No staffing estimates have been released.
Employment has decreased at the plant over the years, now standing at approximately 4,300 hourly and 400 salaried workers, compared to 7,500 in 1994 when the facility last received a major upgrade.
A tense period ends
The announcement of a new car line for the assembly plant ends years of anxious waiting. Talk of a new product for the plant has been circulating since the mid-1990s.
At one time, officials were talking about having the new plant construction complete and the new car launched by this year.
Tension grew when GM announced it would build the current Cavalier and Sunfire models in Lordstown only until 2004.
GM has said it would have to invest as much as $1 billion, including the $500 million in plant remodeling and upgrades, to replace the Cavalier and Sunfire designs with a new small-car line.
Those big-money figures are the main reason the decision has been so long in coming. GM officials have been hammering out a business plan that would allow the company to make the small cars profitably so the cost of the new line could be justified.
The plan they were working on called for reconfiguration of nearly every department in the sprawling plant. The union and plant management have proposed a way to keep the plant operating during the construction.
One important development came in January 2001, when union workers at the assembly plant overwhelmingly approved a new labor contract to take effect after the plant's current contract expires in 2003, but only if GM approved the new car line.
The contract was approved by 81 percent of production workers and 74 percent of skilled trade workers, even though it included work rule changes that some union members didn't like.
GM had told UAW Local 1112 that it would not consider investing in the plant without the contract. The vote was considered a show of good faith by the workers, and evidence of their commitment to winning a new product for the plant.
Quality and productivity improvements were likely also a factor.
The quality of cars produced at the Lordstown plant improved 24 percent in 2001, according to a study released in June by Harbour and Associates of Michigan, and productivity showed a 13 percent improvement.
The study showed Lordstown workers spent a total of 24.2 labor hours per vehicle in 2001, a 7 percent improvement over the previous year, and the improvement grew to 13 percent when changes in the testing firm's formula were factored in.
Design advancements also helped move the project along. GM had said for years that it loses money on its Cavalier and Sunfire and that it wants the next generation of small cars to be moneymakers.
Designers found one way to cut costs by consolidating the number of platforms that GM bases its cars on, and they agreed early on that the replacement for the Cavalier and Sunfire will be based on the company's new Delta platform. The Saturn Ion, set for release this fall, will be first car using the Delta platform.
Though the 2003 Cavalier and Sunfires rolling into the showrooms this month have an updated look and several new features, the cars are still based on the same model design the company launched in 1995.
XContributing to this report was Trumbull Staff Writer Denise Dick.