GM announces $1 billion U.S. investment, 7,000 U.S. jobs


By Kalea Hall

khall@vindy.com

LORDSTOWN

Local union leaders are always hopeful investment will come to the General Motors Lordstown Assembly Plant.

“There’s a couple of projects that would require funding for us and we would be happy to take advantage of that,” said Glenn Johnson, president of United Auto Workers Local 1112 at GM Lordstown. “I’ve always said that if GM is willing to continue to invest here, we will take it and make the best of it.”

On Tuesday, GM announced it would invest $1 billion into U.S. manufacturing operations, creating 7,000 U.S. jobs. But the automaker didn’t specify where the investments will go, only that the investments will “cover multiple new vehicle, advanced technology and component projects” and they will be announced throughout the year.

The announcement comes the same week the third shift will end at the Lordstown plant because of consumers buying more sport utility vehicles than small cars, such as the Chevrolet Cruze built at the plant. The loss of the third shift will cost about 1,200 hourly jobs. With a total of 4,500 jobs, the Lordstown plant is Mahoning and Trumbull counties’ largest employer.

Johnson, who represents 3,000 assembly workers, and UAW Local 1714 President Robert Morales, who represents 1,400 fabrication plant workers, say the plant is focused on reaching the benchmarks GM wants.

GM plants follow Global Manufacturing System principles, which includes “built-in-quality.” Built-in-quality has four levels with No. 4 being the highest level. Lordstown is at built-in-quality level 3, but working toward level 4.

“This is all a part of being able to raise our hand and say we are living up to our end of the bargain and keep us in mind if there’s a product allocation,” Morales said.

The plant also is prepared for a possible market shift back to small cars, but analysts see no end in sight for the SUV trend.

“We are prepared for the market to change and, if it changes, we will be ready for it,” Morales said.

On Tuesday, GM also announced it will begin work on bringing back axle production to the U.S. for its next-generation full-size pickup trucks. This brings work previously done in Mexico back to Michigan, creating 450 U.S. jobs. The automaker has worked to create supplier centers – also known as industrial parks – near its U.S. plants including Lordstown.

In 2014, NorthPoint Development purchased 173.5 acres of vacant industrial land adjacent to GM Lordstown. The park, known as the Lordstown Logistics Center, was to house GM suppliers and possibly other distributors. NorthPoint couldn’t be reached for comment on what stage of development the Lordstown park is in.

“As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners,” said Mary Barra, GM chairman and CEO, in a statement. “The U.S. is our home market, and we are committed to growth that is good for our employees, dealers and suppliers and supports our continued effort to drive shareholder value.”

President-elect Donald Trump went after automakers for Mexico production, and it seems they’ve answered his concern.

Trump tweeted Jan. 3: “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!” The Cruze is built in Lordstown, but last year a small amount of Cruze sedans built at the plant in Ramos Arizpe, Mexico, were sent to the U.S. to supplement the market.

The Ramos Arizpe plant also builds the Cruze Hatchback for the U.S. market and other markets.

That same day, Ford announced it would invest $700 million to expand its Flat Rock Assembly Plant in Michigan for electric-vehicle production, along with the Mustang and Lincoln Continental, instead of investing $1.6 billion to build a new plant in San Luis Potosi, Mexico.

During his campaign, Trump continually called out Ford on its Mexico production plans. He also suggested putting a 35 percent tariff on U.S. auto imports from Mexico, and he wants to renegotiate the North American Free Trade Agreement.

Hyundai also announced Tuesday that it will invest $3.1 billion in U.S. plants.

“With all the jobs I am bringing back into the U.S. [even before taking office], with all the new auto plants coming into our country and with the massive cost reduction I have negotiated on military purchases and more, I believe people are seeing ‘big stuff,’” Trump tweeted Tuesday.

GM sent a statement to The Vindicator regarding how long the automaker was considering the investment decisions and Trump’s influence:

“All of the decisions behind [Tuesday’s] announcement are good business decisions and they have been in the works for some time.”

Jack Nerad, executive editorial director and executive market analyst for Kelley Blue Book, explained that automakers have to figure out where’s the best place to build vehicles, and to do that, they look at a lot of factors, including the political climate.

“Essentially, they are bets,” Nerad said of automakers’ investment decisions. “Then they deal with the bets they’ve made.

“This is the result of job owning by the incoming president. Maybe he was effective. [Automakers] are talking about it and are aware of it. I don’t think anyone is advising them to announce a big factory in Mexico.”

Union leaders have said they welcome any changes to trade agreements since they are in favor of fair trade not free trade, but Johnson doesn’t think Trump led GM to announce its U.S. investment Tuesday. In 2016, GM invested $2.9 billion in U.S. plants.

“Like every year around this time, they announce funding that will be distributed around North America,” he said.

“It’s a pretty standard operating procedure for GM.”

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