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GM Complex weathers highs, lows



Published: Tue, December 29, 2009 @ 12:00 a.m.

By Don Shilling

The General Motors’ Lordstown Complex pieced together hundreds of thousands of new cars this decade, but it also assembled something else — a new image.

The plant entered this decade as the poster child of what was ailing GM — poor labor-management relations and high costs. GM was prepared to shut the place down.

Lordstown closes the decade, however, as a survivor and more. Reduced costs and cooperation between union officials and plant officials have led GM to name Lordstown as one of its key plants in its post-bankruptcy turnaround.

The transformation has been selected by Vindicator editors and reporters as the top business story of the decade.

Dave Green, president of United Auto Workers Local 1714 in Lordstown, said GM wasn’t keeping secrets when the decade started. Managers that it sent to the complex were told they would be shutting down operations.

But the threat did something unexpected: it brought management and labor together, Green said.

Workers approved contract concessions to reduce costs, and the community rallied behind them with a campaign called “Bring It Home.”

“It” was the a new small car to replace the long-running Chevrolet Cavalier. In 2002, GM delivered the good news. It saw enough changes in Lordstown to persuade it to spend $1 billion to upgrade the complex and build the Chevrolet Cobalt there.

It followed that up with the recent upgrade of $351 million to prepare for the Chevrolet Cruze, which is expected to be a key car for GM’s future.

In order to become competitive on a world stage, however, Lordstown has had to shrink. It started the decade with 7,400 hourly workers. It now has about 3,300 working two shifts.

JOBLESSNESS RISES

Here are the other stories in the decade’s Top 10 business stories:

GM Lordstown isn’t the only local business scaling back on jobs. A drive for efficiency and the worst economic downturn in 70 years have led to unemployment rates that have been higher than state and national averages for the entire decade. The Mahoning Valley’s jobless rate spiked to 15 percent in 2009, the highest it had been in 26 years.

It currently stands at 13.4 percent, and Youngstown has the highest rate of any city in the state at 14.5 percent. PACKARD LOSES 4,800 JOBS

Adding to the scarcity of jobs has been the cutbacks at Delphi Packard Electric. The maker of auto parts employed 5,500 hourly workers at the start of the decade. That had been cut to 3,500 when Delphi Corp. filed for bankruptcy in 2005. When it emerged this year, just 700 hourly employees were left and pay scales were drastically reduced.

TURNING TECH GROWTH

A bright spot in the decade was the rise of Turning Technologies, which started in the Youngstown Business Incubator with three founders but moved into a new $6 million headquarters with 140 employees. The incubator is leading efforts to create a Tech Block downtown to be ready for the expansion or relocation of other technology-based companies.

FORUM HEALTH SHRINKS

Humility of Mary Health Partners won the health-care battle of the decade. Both it and Forum Health spent millions of dollars to expand in Boardman, but so far, only HMHP has made it work. Forum has filed for bankruptcy and its future is in question.

UNSTABLE STEEL INDUSTRY

The area’s largest steel company was constantly in flux the past 10 years. Hit hard by a downturn in the market, WCI Steel in Warren filed for bankruptcy in 2003 and operated in uncertainty until a group of lenders took control of the company in 2006. Severstal, a huge Russian company, bought the mill in 2008 and promised large upgrades, but another market downturn forced it to idle all operations. About 1,200 workers are now on lay off.

REGIONAL AIRPORT WOES

It was a decade in which the Youngstown-Warren Regional Airport has gone from offering several flights per day to airports such as Detroit and Pittsburgh to offering vacation flights to Florida several times per week and charter service to gambling destinations. The airport received a $575,000 federal grant in October 2007 in an effort to attract a carrier to provide daily service again, but it hasn’t found an airline willing to take the bait.

PHAR-MOR’S DEMISE

The saga of Youngstown-based Phar-Mor ended in 2002 when its remaining 73 stores were closed. Stung by Wal-Mart and other larger retailers, the drugstore chain could not emerge from its second stay in bankruptcy. At one time, Phar-Mor had 300 stores nationwide and 1,000 employees at its downtown headquarters.

66Two Mahoning Valley financial institutions sets their eyes on growth this decade. Warren-based First Federal Savings & Loan merged with Boadman-based FFY Bank in 2000 to created First Place Bank. It then expanded to Michigan and other parts of Ohio. Meanwhile, Home Savings and Loan Co. also grew with acquisitions locally and in western Ohio. All banks were hurt by the nation’s financial collapse in 2008, and both First Place and Home Savings reported large losses and saw stock prices sink. CALL CENTERS’ GROWTH

Call centers make up one industry that continues to grow in the Valley. Recent announcements include a new Youngstown center that expects to employ 500 and the addition of 150 jobs at AT&T’s Boardman center. In 2004, MCI closed its Niles center which had 700 workers, but West Corp. has moved in and employs nearly 1,300. Infocision last year built a new center in Boardman and expanded in Austintown.

shilling@vindy.com


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