Download Market Shifts Leave US Manufacturing Behind in MP4 format - 60.9MB - 2:54 30 November 2018 (4:00AM) U.S. President Donald Trump has challenged car giant GM's decision to close five plants across the United States and Canada just weeks before the holidays. GM says changing car habits are to blame for the closings, which impact thousands of workers across North America. VOA's Katherine Gypson reports from the GM plant in Ohio, where workers say they feel left behind by the global marketplace.
Download GM Workers Face Grim Holiday Season With Plant Shutdowns Ahead in MP4 format - 57.2MB - 2:58 3 December 2018 (9:08PM) Just weeks before the holidays, thousands of workers in small towns across the U.S. received the worst possible news: their employer - auto giant General Motors - would be shutting down several automobile factories, throwing their lives and their families into insecurity. It’s the latest blow for blue-collar workers facing unprecedented challenges in a competitive global marketplace. VOA’s Congressional correspondent Katherine Gypson reports on what this means for the people of Lordstown, Ohio.
LORDSTOWN, OHIO — President Donald Trump insists his new trade agreement with Mexico and Canada will address the exporting of U.S. manufacturing jobs overseas. That pledge, however, comes on the heels of auto giant General Motors' announcement of the layoff of 14,000 employees in five factories in the United States and Canada.
Despite the president's optimistic pronouncements, the General Motors announcement indicates broader market shifts in the automotive industry that are unlikely to be reversed.
General Motors justified the decision as a result of shifting economic trends that have seen consumer preferences shift away from mid-sized vehicles and toward sport utility vehicles (SUVs) and electric cars. The company said the move "is transforming its global workforce to ensure the right skill sets for today and the future."
Those moves toward increased efficiency also include a 25 percent cut of the executive workforce.
But in Lordstown, Ohio, workers whose livelihoods have depended on jobs in GM factories struggled to understand the move.
The Lordstown plant manufactures the Chevy Cruze, one of the mid-sized cars auto manufacturers no longer see as profitable. Trump specifically addressed the impact on the Lordstown plant shortly after GM's decision, saying, "They say the Chevy Cruze is not selling well. I say, 'Well, get a car that is selling well and put it back in.'"
Workers are holding on to that hope with the Lordstown plant in an "unallocated status" that leaves open the possibility of GM moving in another product. Local union leader Dave Green acknowledged that issues with the Chevy Cruze were part of an overall industry trend away from smaller cars.
"They're not building cars, sedans anymore, but people are still buying cars," Green told VOA. "Part of it is that they need to be priced right and they need to be priced fair. If I can go into a dealership and lease an SUV cheaper than a Chevy Cruze — you know, most Americans want more for less. So they're going to get the bigger, the better, the more for less and it is what it is. I think the car was priced a little out of its range."
The 6.2-million-square-foot Lordstown plant is well-placed in the center of the country, with easy access to major highway artery Interstate Highway 80 and an infrastructure of secondary plants.
Green said 80 percent of the plant's production is sold within a 600-mile radius. "GM would be foolish to walk away from it," he said.
The 1,600 workers anticipating a March 2019 layoff from the Lordstown plant certainly hope that's the case. They earn $30-40 an hour compared to the next best option in the area, $10 an hour at the aluminum factory.
Lordstown is part of the broader Warren-Youngstown, Ohio, area that once thrived on the presence of steel mill manufacturing. When those plants shut down in the 1970s and '80s, the auto industry became the lifeblood of the local economy.
"That's is the largest plant that we have," said Trish Williams, owner of the Ice House restaurant in Austintown, Ohio. She has several family members and friends who have worked at the GM plant in the past and present.
"That keeps this town going. Our steel mills are gone. Our factories are gone. [Hewlitt] Packard is closed. General Electric is gone. Chrysler is gone and GM was it. GM was what kept this here — it may turn into a ghost town," Williams said.
'Don't sell your house'
Trump visited Youngstown in July 2017, telling workers, "Don't sell your house. Don't sell your house. Do not sell it. We're going to get those values up. We're going to get those jobs coming back. And we're going to fill up those factories, or rip them down and build brand new ones."
Many residents said they do not hold Trump responsible for GM's decision, a move that could devastate the local economy.
"The president doesn't own GM," waitress Lisa Miller said. "Nor can he say you can't do this, you can't do that. We are a free country. I believe the president will push with all his might — as we've already seen him doing — to keep them here and to change things, but this was something that was out of his hands."
Just days after the GM announcement, Miller said she was already noticing a drop in sales and an end to the usual lunch to-go orders from GM workers.
Some of those workers will be able to transfer to other plants around the country based on their seniority within GM. But many workers expressed concern to VOA about the number of temporary employees — who earn far lower rates per hour — working in those plants. They are also aware of GM's plant in Mexico that builds the Chevy Blazer, an SUV.
"Why is our plant not getting the Blazer?" asked Rebecca Zak, an 18-year veteran of the Lordstown GM plant. "Why is it being built in Mexico? It's mind-blowing. I heard in Ramos, Mexico, they get paid $2.65 an hour."
Zak said she sees the decision as part of a trend toward corporations enriching themselves at the expense of the worker.
"We're the ones that build this car, we are the ones that got this company this far and who are the ones who are suffering? The worker, not corporate America. Six billion dollars in the third-quarter and they can justify laying off 14,000 people," she said.
Those 14,000 people represent just 7 percent of GM's 180,000-person workforce, a strategic shift for a company in a competitive automotive market. What remains to be seen is whether that strategic shift will include places like Lordstown.
But as Lordstown employee Dan Smith said, "Any industry is cyclical. Gas could go up to $5 a gallon and then, poof, there goes the truck-SUV market. And they're going to need small cars. It's something we went through, my dad's worked there."
Smith said he was shocked by the decision but did not entirely fault GM for operating a plant in Mexico with lower-paid labor.
"Business-wise that makes sense, but then to sell it here in the United States doesn't make much sense for American people to buy an American car that's built in another country," he told VOA.
For Williams, waiting to see how the decision impacts her community and her business, the equation seemed simple.
"Smaller cars, bigger cars — they all have four wheels," she said. "They've made other cars off that line — why not bring another car back?"