Sunday, July 9, 2017
It’s bad enough that sales of the Chevrolet Cruze, built in General Motors’ Lordstown assembly complex, continue to be soft.
But what’s even more troubling for Mahoning Valley residents is the uncertainty surrounding the future of one of this region’s leading employers.
The story on the front page of The Vindicator’s Independence Day edition illustrated the seriousness of the situation.
Last month, GM sold 12,828 Cruzes in the United States, compared with 18,666 in June 2016 – a decrease of 31.3 percent.
The decrease reflects a nationwide trend for small cars. The relatively low cost of gas at the pumps has spurred the demand for SUVs and trucks.
As a result of the large inventory of Cruzes at the Lordstown plant, General Motors has taken drastic action with regard to the employees.
A five-week layoff period is in effect, and there is a possibility of further layoffs later this year.
Production also was halted during the weeks of March 13, 20 and 27.
In January, GM eliminated the third shift at the Lordstown complex, resulting in 600 assembly plant workers and 235 fabricating plant workers losing their jobs. The fallout wasn’t just confined to the automaker’s operations.
About 100 union workers at Comprehensive Logistics in Austintown lost their jobs. Comprehensive Logistics does sequencing for the Lordstown plant.
Magna Seating Systems in Lords-town, where the seats for the Cruze are built, laid off 75 employees; Jamestown Industries in Austintown, which makes the front and rear bumpers for the Cruze, laid off 15 workers.
The reaction from auto-industry observers to what is occurring with the Cruze and the Lordstown plant is mixed.
“Cruze sales were bad,” Michelle Krebs, executive analyst for Autotrader, told The Vindicator with regard to the June 2016 and June 2017 numbers. “It’s a continuing story.”
However, Krebs did note that the reduction in sales was not only the result of today’s buyers preferring SUVs and trucks, but GM’s effort to reduce its fleet sales.
Indeed, if the fleet sales are excluded from the mix, sales of the Cruze do provide an encouraging picture.
Retail sales of the older and next generation models and the Cruze hatchback, which is made in Mexico, were up 3.3 percent year-over-year in June.
Alex Gutierrez, senior analyst for Kelley Blue Book, said the compact car, a one-time best seller for GM, was “heavily sold into rental,” but such sales were down 76.2 percent last month compared with June 2016.
“But from a retail perspective, it’s holding its own and doing well compared to prior results,” Gutierrez told The Vindicator. “Consumers see the value of the vehicle.”
If that’s true, we wonder why the decision-makers in the company headquarters in Detroit haven’t publicly announced their plans for the future of the Lordstown assembly complex.
We are well aware that major corporations play their cards close to the vest, but with President Donald J. Trump declaring war on companies that fail to maintain and create jobs in America, GM would win a few points with the White House if it made a commitment to the future of the Lordstown plant.
As we have noted in the past, Republican Trump carried predominantly Democratic Trumbull County and fared well in predominantly Democratic Mahoning County in last year’s presidential election.
The message he delivered in this region resonated with blue-collar, white male voters. Trump railed against NAFTA and other such trade agreements and berated American corporations for moving jobs abroad.
Since taking office Jan. 20, President Trump has boasted that the auto industry is falling into line and is investing billions of dollars in America.
“I mean the car industry is not going to leave us anymore. They were leaving – if I didn’t win this election, you would have lost your car industry to Mexico and to other countries. They’re not leaving anymore, believe me. There’s retribution if they leave. There was no retribution.”
The word “retribution” used by the president should serve as a warning to GM as it contemplates the future of its Lordstown assembly complex.