Wednesday, April 18, 2018
By Kalea Hall
April 16, 2018 letter to GM CEO, Mary Barra.
U.S. Sen. Sherrod Brown sent a blistering letter to General Motors CEO Mary Barra this week demanding answers about the 1,500 Lordstown Assembly Complex layoffs coming in June.
“This decision will be devastating to the families and communities of the workers whose lives will be impacted, and it is particularly galling after your company received massive tax benefits from the recent enactment of the corporate tax cut bill,” wrote Brown, a Democrat of Cleveland.
“I urge you to reverse this decision and instead invest your tax windfall in the facility and workers in Lordstown.”
Last Friday, the Mahoning Valley learned the second shift will be eliminated at the plant where the Chevrolet Cruze, a compact car, is produced. A total of 1,500 jobs will be cut because of the elimination, but the company announced a special attrition program that could mitigate the layoff number.
GM said on Tuesday a response to the letter would go directly to the senator and would not comment further. As of Tuesday evening, the senator’s office hadn’t released a response from the company.
In addition to those jobs, an unknown amount of supplier jobs also will be cut at local supplier plants.
Brown noted GM’s “all-time record” revenues reported in its 2016 filings with the Security and Exchange Commission. The senator also noted how GM touted the Cruze earlier this month when it released details about the 2019 Cruze, which will hit dealer lots later this year.
GM said the second shift will be eliminated in mid-June to align slowing demand for the Cruze with supply. In March, the Cruze hit 11 months of year-over-year sales declines.
“Given GM’s ‘all-time record’ revenues and focus on the Cruze, it is hard to understand why the company would decide to lay off more than 1,500 workers at its Cruze plant in Lords-town,” Brown wrote.
Brown mentions the corporate tax cut legislation, which reduced the corporate tax rate from 35 to 21 percent, and how that could benefit GM Lordstown.
“I am aware that the company believes reduced market demand for the Cruze justifies the layoffs, but that does not explain why the company refuses to use its tax windfall and its world-class Lordstown workforce to retool the facility to assemble a more profitable car,” Brown wrote.
At the end of the letter, Brown asks GM 11 questions to find out what the company has planned for the future of GM Lords-town.
GM has previously said that it does not discuss future product allocation for competitive reasons.
Matthew DeLorenzo, managing editor at Kelley Blue Book, said there are a lot of factors that go into the company deciding two shifts aren’t needed at the plant.
“It’s very complicated,” he said. “It’s just very unfortunate the fact that people aren’t buying compact or subcompact vehicles in the numbers that they used to. The market has shifted away from traditional cars and sedans into crossover/SUVs, and it looks like it is a permanent [shift].”
The fact that GM plans to keep one shift at the plant means there’s still a market for the Cruze, DeLorenzo said.
“If it was truly a disaster, they would be shutting down the entire plant,” he said. “The question is what will GM be doing with the plant.”