By Jordyn grzelewski
and ED RUNYAN
As the dust settled the day after General Motors announced it will discontinue production of the Chevy Cruze and idle its plant in Lordstown, as well as four others in North America, reactions continued to pour in Tuesday from the Mahoning Valley and beyond.
President Donald Trump tweeted about it. The Valley’s elected officials floated ideas on how to save the plant. Local union and economic development leaders prepared for next steps ahead of the March 1, 2019, plant shutdown. Officials in Trumbull County evaluated the economic blow that would follow the shuttering of one of the Valley’s largest employers.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get!” Trump tweeted Tuesday afternoon. “We are now looking at cutting all GM subsidies, including for electric cars. General Motors made a big China bet years ago when they built plants there [and in Mexico] – don’t think that bet is going to pay off. I am here to protect America’s Workers!”
Some experts, however, noted that not only would Trump need congressional approval for such a move, it could be irrelevant.
“Cutting all government subsidies would be detrimental to GM, but Trump’s tweets are a bit of an empty threat when it comes to the EV [electric vehicle] tax credit,” said Jeremy Acevedo, manager of industry analysis for Edmunds. “GM has already taken advantage of the bulk of the EV tax incentive and will most likely hit the 200,000th-vehicle mark at the beginning of 2019. If the President took a more drastic step and eliminated the credit for the entire industry – which would require a massive policy overhaul – this could possibly even give GM an advantage.”
General Motors quickly reacted to Trump’s threat with a statement touting its “commitment to U.S. manufacturing.”
“GM is committed to maintaining a strong manufacturing presence in the U.S., as evidenced by our more than $22 billion investments in U.S. operations since 2009. [Monday’s] announcements support our ability to invest for future growth and position the company for long-term success and maintain and grow American jobs,” the statement read. “Many of the U.S. workers impacted by these actions will have the opportunity to shift to other GM plants where we will need more employees to support growth in trucks, crossovers and SUVs. GM’s transformation also includes adding technical and engineering jobs to support the future of mobility, such as new jobs in electrification and autonomous vehicles.
“We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing.”
Locally, economic development leaders hope to position the area as an attractive site for GM to allocate one of its autonomous or alternative fuel vehicles.
Noting GM’s planned investment and growth in this sector, Youngstown/Warren Regional Chamber President and CEO James Dignan said Tuesday local leaders hope to make the case to GM that such a project would be a good fit for the Lordstown plant. He said the area has a strong workforce and other factors working to its advantage, but the Cruze – following the trend of other small cars – was just not selling.
“We just want them to know we can be part of the solution. We’re not part of the problem,” Dignan said. “Whatever GM is looking to invest in next, we have to make sure we’re being considered for that next-generation vehicle.”
On Tuesday, he began reaching out to other local economic development entities. The chamber, Eastgate Regional Council of Governments, the Western Reserve Port Authority and the Mahoning Valley Economic Development Corporation plan to meet later this week to begin developing an action plan in response to the GM Lordstown news. Dignan said local entities also plan to engage with regional and state economic development partners.
Part of the effort also includes Drive It Home, a grass-roots coalition that launched a campaign last Monday to rally support for the plant. Initially, the plan was to start the campaign by raising public awareness and community support for the plant, Dignan said. Monday’s news makes the situation more pressing.
One next step local officials have planned is a prayer initiative. UAW Local 1112 President Dave Green, who spent Tuesday visiting the plant and talking to workers, said there will be a prayer vigil at 3:15 p.m. Thursday at the flagpole in front of the plant. He is also asking community members to pray for the plant and its workers every day in December.
“That’s the very next step,” he said. “Every week, hopefully, we’ll have one more step and get more information and continue to let people throughout the state know how important manufacturing is throughout the community and the state.”
The impact on local government bodies of losing Trumbull County’s largest employer, the General Motors Lordstown assembly plant, will be widespread.
It will affect Lordstown’s schools and village government, Warren and Niles income tax collections and county revenue.
Perhaps one of the greatest saving graces is the other business activity taking place in Lordstown, such as the new Lordstown Energy Center that recently opened and the HomeGoods distribution center expected to be built near the GM complex.
The 2017 Trumbull County audit indicates that GM employed 3,600 workers in 2017, 5.8 percent of the county’s total employment. At that time, GM employed about double the next largest employer, the Youngstown Air Reserve Station, which had 1,792.
GM was also the county’s largest employer in 2008 when there were two shifts and employed 2,300 workers. The Air Reserve Station was only several hundred behind at that time, employing 2,031.
Lordstown Mayor Arno Hill says the loss of GM starting in March will cost the village about $1 million of income tax per year. The plant provided about
$3 million per year when it was running three shifts.
The village has not been spending all of the revenue in its maintenance and repair fund because of the loss of the second and third shifts at GM, so there’s money available in that fund and general fund, Hill said.
The village will be fine in 2019 and will look toward revenue from the HomeGoods project to help out after that, Hill said.
“We adjust expenditures based on what’s happening,” he said, “We’re watching it all the time.”
Hill said he’s had conversations with Gov.-elect Mike DeWine, Sen. Rob Portman and others since Monday morning about the future of the plant.
“This is a big priority for all of us,” he said of helping GM bring work back to the plant.
Lordstown schools receives about $800,000 per year in GM property taxes. Trumbull County auditor Adrian Biviano says those property taxes would not go away in March. The company would presumably appeal its tax bill if the plant became an “unproductive asset.”
The school district has said it will lose up to $1.6 million annually in personal tangible property taxes, but it is also gaining money from the opening of the Lordstown Energy Center in the Lordstown Industrial park.
The district will receive $1 million annually for five years, $1.25 million each of the next five years and $1.5 million per year the last five years. If a second plant is built, the district is expected to get additional money.
Outside of Lordstown, one of the bigger revenue losses from the GM shutdown is likely to be the $500,000 per year Warren will lose when it no longer sells water to the plant.
Warren Auditor Vince Flask, however, says the city expects that loss to be fully offset by the water Warren is selling to the Lordstown Energy Center.
Total revenue to the power plant won’t be known for a few months, but it’s expected to exceed $500,000 annually, Flask said.
He doesn’t know how much income tax revenue it receives from GM workers who live in Warren, but it is no more than $161,000 per year, Flask said.
The $161,000 is the amount the city receives from Warren residents working at all of Lordstown’s employers, including GM, Anderson DuBose, Metalco, even restaurants and gas stations, said Tom Gaffney, Warren income tax administrator.
Niles recently received updated information from the Regional Income Tax Agency that collects Niles income taxes.
RITA says Niles stands to lose $62,489 worth of income tax revenue annually when the GM plant closes, said Steve Telego, Niles treasurer.