By Kalea Hall
In a dimly lit union hall, leaders of two local United Auto Workers unions talked about the turning point at the General Motors Lords- town Complex.
In a couple of months, some 1,245 of the 4,500 workers at the GM complex will be laid off indefinitely.
Small cars, such as Lords- town’s Chevrolet Cruze, are underselling so production needs scaled back.
“Small cars have been very good for Lordstown for a huge number of years. And due to the shift in consumer demand for full-size trucks, crossovers and SUVs, the market has softened ... across the small car segment,” said Glenn Johnson, president of UAW Local 1112. “It’s hard for our members today.”
On Tuesday, GM informed employees that the third shift at the Lordstown complex would end Jan. 23, affecting 1,202 hourly employees and 43 salaried employees. Also, the third shift at Lansing Grand River where the Cadillac ATS, CTS and Chevrolet Camaro are built will end Jan. 16, affecting 810 hourly employees and 29 salaried employees.
“We are looking ahead at the car market still being slow because gas prices are low and consumers are looking more toward the crossover and full-size trucks,” said Tom Wickham, North American Manufacturing and Labor spokesman.
Temporary workers will be the first affected by the cut followed by those with the least seniority.
“It’s very emotional,” said Robert Morales, president of the UAW Local 1714. “We had some members tear up and cry. I think what really gets to them is there is no return-to-work date.”
Both Johnson, who represents 3,000 assembly plant workers, and Morales, who represents 1,400 fabrication plant workers, were unsure of what seniority levels will be affected by the cut.
“We will work with our members and work with our management team to make sure that we do the very best for them and their families,” Johnson said.
The Cruze has been in production at Lordstown since 2010, which is when the third shift was added.
The first-generation Cruze had successful sales that in 2011 led it to be the first American-made car to lead that segment in five years. In 2014, the Cruze had its best sales year with 273,060 sales compared with 2013’s 248,224 sales.
In 2015, the Cruze saw heavy competition from larger vehicles, and sales dropped 17 percent. For the past three months, Cruze sales have been up, but so far this year, Cruze sales have dropped 19.9 percent over 2015.
The next-generation Cruze was unveiled in July 2015 with a sleeker style, enhanced technology and safety upgrades. Its production launched this year at the plant and has had some hiccups along the way including supply chain issues.
In June, GM announced it would bring in Cruzes built at the Ramos Arizpe, Mexico, plant to supplement the U.S. market because supply levels were low here. That supplement will end when the third shift leaves Lordstown, Wickham said.
Morales stressed that GM’s call to cut the third shift had nothing to do with the Lordstown workers’ ability to build cars.
“It is something that is out of our control,” Morales said.
The loss of the third shift at Lordstown will also impact local plants that work with GM. Magna Seating Systems in Lordstown, Jamestown Industries in Austintown and Comprehensive Logistics in Austintown all support the plant.
“It will adversely affect our supply chain,” said Johnson, who also represents Magna workers.
Michelle Krebs, senior analyst for AutoTrader.com, was not surprised by the announcement.
“Even though the Cruze is getting wonderful reviews, it is still a car,” she said. “This has been part of the strategy to make sure inventories don’t get too high and they keep incentives in line.”
Krebs sees no end in sight for the trend of popularity for larger vehicles.
“We have seen a dramatic shift away from small cars,” she said. “I think it is purely consumer preferences.”
In addition to the production cuts, GM also announced it will invest more than $900 million in three facilities: Toledo Transmission Operations in Ohio, Lansing Grand River in Michigan and Bedford Casting Operations in Indiana — to prepare for future product programs.