GM said it will spend $500 million upgrading its assembly plant and an additional $150 million on its fabricating plant.
By CYNTHIA VINARSKY
and DAVID SKOLNICK
VINDICATOR STAFF WRITERS
LORDSTOWN -- General Motors' announcement that its new small car will be produced here is a sign that the Mahoning Valley's economy has turned the corner, Gov. Bob Taft and U.S. Sen. George Voinovich said today.
"This is a sign of good things to come for the Mahoning Valley," Voinovich said this morning at a press conference to announce the new car line.
"I've been looking forward to this for many years. I've been concerned about this facility for a dozen years. Many of us have been working and praying for this day. It's a great psychological boost for this area," Voinovich said. Taft echoed his sentiments.
"Keeping GM in Lordstown has been my No. 1 economic priority since I took office as governor," Taft said. "This announcement assures that the Lordstown GM plant, the cornerstone of the Valley's economy, will remain here for years to come. I personally feel that the Mahoning Valley is turning the corner toward economic prosperity."
Sending a message
Voinovich said later that the new car line will "send a message throughout Ohio and the nation that the Valley is a good place to do business. This will put the Valley back on the map as far as people looking for places to build new facilities."
Taft agreed, saying that GM's commitment would probably mean other companies will take a look at locating in the Valley.
"GM is saying, 'We want to build the next generation of small cars in the Valley, and that it is a good place to be competitive in a tough world economy," the governor said. "This is a sign to others that they should come to the Mahoning Valley."
A 'long haul' for union
Taft and Voinovich were joined by other government dignitaries at the press conference, where GM officials and UAW Local 1112 and 1714 leaders breathed a collective sigh of relief over the announcement.
"It's been a long haul for our plant and our members," said John Mohan, shop chairman for Local 1112, which represents members at the GM Assembly plant. "The membership has taken this plant from the middle of the pack to the top of the pack. The membership made it impossible for GM to ignore us. It's been a long struggle for our membership."
Jim Graham, Local 1112 president, and Bob Chambers, Local 1714 president at the fabricating plant, stressed the economic importance of the new product line.
"If there are any skeptics who think closing this plant wouldn't have affected the economy, I'm glad they didn't have a chance to find out," Graham said. "This is the first good news we've had in 25 years."
Rise in productivity
Chambers said he met 18 months ago with GM officials in Michigan, who told him if productivity at the Lordstown facility did not improve, it would quite likely signal the end of GM's presence in the Valley.
Chambers took that back to his membership, and productivity has increased significantly since then.
"We've had a long history of social, economic and, in recent years, political turmoil," Chambers said. "This is the rebirth of the Mahoning Valley. For those critics and naysayers who say this Valley is never going to move forward, I'm firmly convinced you're wrong. Today is a prime example of that."
Voinovich and his special assistant for development, Michael Koren, also visited Detroit and met often with top GM officials to help win the new model for the Mahoning Valley. Voinovich was Ohio governor when GM first started talking about bringing the new product to Lordstown.
GM plans to add 140,000 square feet to the plant for the new product line, said John R. Buttermore, manufacturing manager of GM North America. Renovations are to be completed by 2004, in time to roll out the 2005 models that will replace the Chevrolet Cavalier and Pontiac Sunfire.
"It's a win-win for all stakeholders," Buttermore said. "It ensures job security and economic security for Lordstown, the Mahoning Valley and the state of Ohio. Lordstown has been a great place to do business. It will be an even greater place to build a new car."
Taft announced an incentive package for GM that includes $37 million in machinery and equipment tax credits, a $20 million business development grant, a $4.5 million work-training grant, and a $1.5 million low-interest loan for Trumbull County to help fund waterline improvements, as well as tax credits and tax abatements approved by local and county government.
Taft said it's a "very challenging environment to keep auto jobs in the state" but he is doing what he can to make sure facilities such as Lordstown remain in Ohio. He cautioned that other companies probably would not receive the state incentive package that Lordstown GM obtained, because other companies would not be able to make the financial investment the automaker has made.
GM has promised to retain at least 2,600 jobs at the assembly plant for seven years after the newly refurbished facility starts making 2005 cars, Mary Anne Sharkey, Taft's spokeswoman, said.
That plant employs 4,500 hourly and salaried workers, but GM officials have said that increased automation and better engineering will likely reduce the number needed for the new car model. The company has agreed, Sharkey said, to reduce employment through attrition, not layoffs.
The adjacent fabricating plant, which produces sheet metal parts for the assembly plant and several other plants, employs 2,590.
Dan Flores, a GM spokesman, said the company intends to spend $500 million at the assembly plant to reconfigure and retool the general assembly area, retool the plant's body shop and construct a state-of-the-art paint shop.
In addition, the automaker will spend $150 million at the fabricating plant, refurbishing press systems and buying or retooling equipment for the new vehicle program, GM officials said today. GM had in the past discussed spending about $230 million to upgrade the fab plant, but Flores said he had not heard that figure mentioned.
Plans call for maintaining production of the Cavalier and Sunfire while renovations are under way, Flores said. "The Lordstown Assembly Plant is a high-volume, very important plant to General Motors, and our intention is that we have minimal or no impact on production," he said.
In 2001, the Lordstown plant built about 241,000 Cavaliers and 83,000 Sunfires.
For competitive reasons, Flores said the company will not say whether the Cavalier and Sunfire names will be replaced and will not provide details about the new vehicle until much closer to its release date.
Serious about small cars
"GM's investment in Lordstown signifies that the company will continue to aggressively compete in the very important, small-car segment," said Gary Cowger, president of GM North America and once a manager of the Lordstown Assembly Plant.
Richard Shoemaker, UAW vice president and director of the union's GM Department, praised GM for making a significant investment, saying it will provide job security for "loyal, hard-working UAW members for years to come."
The investment will also contribute to the economic stability of the Mahoning Valley and the state, said Lloyd Mahaffey, director of UAW Region 2B.