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Did GM nix huge deal for Cruzes?

By Bertram de Souza

Sunday, March 17, 2019

A highly respected businessman from Cleveland who owns a string of dealerships that sells vehicles from Rolls Royce and Mercedes-Benz models to GMCs and Buicks reportedly offered to buy thousands of Chevrolet Cruzes a year for five years from General Motors. The only proviso: The Cruzes had to be built at the company’s Lordstown plant.

But individuals familiar with the proposal tell this writer that GM CEO Mary Barra was not willing to change the company’s plans to idle the Lordstown plant March 6.

That day, the last Cruze, once the best-selling model in GM’s fleet, rolled off the assembly line. The idling of the plant brought to an end the last shift of 1,500 workers. Not so long ago, the 53-year-old assembly complex ran three shifts with a total of 4,500 workers.

Had GM agreed to the deal from businessman Bernie Moreno, two shifts would have been retained.

Dave Green, president of UAW Local 1112, when contacted by this writer with details of the proposal, acknowledged he had met with Moreno and had watched a PowerPoint presentation.

The highly regarded Clevelander’s goal was to form a company to provide an Uber-style car hire service, but under strict regulations and oversight.

The company would own the cars and have the drivers on staff.

Green was told about the financials, including arrangements with banks and the participation of a major automotive company.

The UAW Local 1112 president and other union officials believed General Motors was presented with a great opportunity to keep the Lordstown complex operating.

It should be noted that Moreno was contacted by The Vindicator and asked about his proposal. He told a reporter that he had signed a nondisclosure agreement and, therefore, could not say anything.

The following email was sent to Daniel Flores, GM Corporate spokesman:

“I’m working on a column for Sunday regarding an offer reportedly made to General Motors by a nationally renowned exotic car dealer from Cleveland to purchase a large number of Chevrolet Cruze sedans built in the Lords-town plant. I am told by two reliable sources that the order for the vehicles would have lasted for five years. I’m sure you aren’t surprised by my interest in the story given the company’s decision to stop production of the Cruze and to “idle” the Lordstown facility.

“Could you shed any light on this?”

Flores called to say he was not familiar with Moreno’s proposal but would inquire with higher-ups in Detroit.

After an hour or so, Flores issued the following statement from the company via email:

“GM leadership took into consideration a variety of market factors when we made the product and manufacturing-related decisions announced last November 26th. The decision to discontinue the Cruze was made in response to market-related declines in customer demand for passenger cars. We don’t believe this segment is viable for us.

“These were very difficult decisions because we know they impact people, families and communities. We’ve been successful with offering job opportunities for Lordstown employees at other U.S. plants that build products in growing market segments.

“The long-term disposition of the Lordstown facility will be determined in the UAW/GM contract negotiations later this year.”

It is noteworthy that GM did not ridicule the inquiry about Moreno, nor did the company tell this writer that it was way too early for him to start drinking.

It may be reading too much into Flores’ statement, but it is revealing that he did not dismiss the inquiry as some conspiracy theory.

It certainly sounds like someone in corporate was aware of the proposal.

This writer also contacted the UAW International in Detroit to find what, if anything, the union intended to do about GM supposedly rejecting a deal that would have kept the Lordstown plant operating.

Brian Rothenberg, head of public relations and former Ohio resident, said the international had not heard about the Moreno offer, but pointed out that UAW International President Gary Jones has said the union is “committed to leaving no stone unturned.”

Read that to mean the Moreno proposal may well be raised when the union and the company begin contract talks this summer.

Meanwhile, here’s a question for President Donald Trump, who has berated GM CEO Barra for idling American plants while expanding those abroad: Why are you avoiding the Mahoning Valley?

The question is prompted by Trump’s absence during the crucial weeks leading up to the March 6 idling of the Lordstown complex.

While his supporters in the Valley are willing to give him a pass and blame everyone else for the end of car production, the fact remains that the president of the United States was nowhere to be found when the autoworkers who voted for him in 2016 walked out of that plant for the last time.

Well, many of them are now free to travel to Lima and Canton on Wednesday to see the man who promised to “Make America Great Again.”

Trump is scheduled to tour the General Dynamics tank manufacturing plant in Lima to tout his huge increase in defense spending, and then is expected to attend a private fundraiser in Canton for his 2020 re-election campaign.

According to Cleveland.com, the Plain Dealer’s online edition, tickets for the fundraiser start at $2,800 for entry to a reception; a photo opportunity with Trump costs $15,000, and dinner costs $50,000 per person or $70,000 per couple.

Will the closing of a major manufacturing plant in the shadow of the country club in Canton – Ok, perhaps not shadow, but driving distance – be a topic of conversation as the well-heeled Trump supporters nibble on tiny canapes?

Get real. The Republican president of the United States does not want to be reminded that the Lordstown plant closed under his watch – after it had been kept open by former Democratic President Barack Obama.