GM bonuses boost Valley economy, confidence
By Ed Runyan
The money is nice, say area business people, but even better than the $4,000 each that Lordstown General Motors employees are receiving this week in profit-sharing is the resulting consumer confidence.
“The last year has gradually been going uphill, and January and February were record-breaking months for us,” said Bill Rutledge, sales manager at Diane Sauer Chevrolet in Warren. “Every day people are getting a lot more confidence in the economy.”
Rutledge said the positive developments at the GM Lordstown plant, where second and third shifts were returned as the facility ramped up to produce the Chevrolet Cruze last spring, are playing a big role in the local recovery.
The announcement this week that GM employees will receive bonus checks as a result of GM’s turning a profit adds to the good news, he said.
The bonuses should inject an estimated $16 million directly into the Valley economy.
GM employees might be among the people coming to the dealership in the coming months to buy a car or truck, but they might also buy furniture, go shopping at the mall and “spend it in the whole Mahoning Valley,” Rutledge said.
Spending it on furniture or clothing will help workers in those businesses to buy a car, he added.
“Finally, we’re going to see a ripple that’s going toward the positive,” he said, after several years of negative economic ripple effects.
Retirees make up a large percentage of the dealership’s business, Rutledge said, so one of the things that excites the dealership is the likelihood that GM doing well will inspire more consumer confidence among the area’s retirees.
State Sen. Joe Schiavoni, D-33rd of Canfield, said it’s time to celebrate the remarkable comeback GM has made.
“Without the stimulus money, we would not have GM, we would not have Lordstown, we would not have the Cruze, and thousands would not be working. We would not have thousands of bonus checks,” he said of loan money that helped keep General Motors in business.
Jim Graham, president of United Auto Workers Union Local 1112 at Lordstown, said each of the 4,000 local workers is getting about $4,000 in profit sharing, depending on how many hours each worked in 2010.
Josh Aikens, executive director of the Home Builders Association of the Mahoning Valley, said the bonus checks will “give some people the opportunity to save money, to save for a new home, to do remodeling of their current home,” he said.
“What we’re seeing during the economic downturn is everybody has cut back on home expenses in order to make sure the electric bill gets paid, the mortgage bill gets paid and the family gets fed.”
“What people are saying is they’re going to stay in their homes for a few more years,” so they are planning to spend some money to fix them up, Aikens said.
“I think it’s a fantastic shot in the arm,” Ken Kollar, general manager of the Eastwood Mall Complex in Niles, said.
of the profit-sharing.
“It makes people — even non-GM employees — feel better. When GM employees get their checks, it’s going to come back to all of us in dining, cars, the mall. People are tired of not doing things because they didn’t have the money.”