Latest GM closures reduces auto-giant to small Ohio presence

The recent announcement will leave Moraine’s DMAX engine plant and a parts warehouse in Butler County as two of the final five GM locations in Ohio. Together they employ an estimated 4,600 people. That is about the same as work for Crown Equipment Corp., the fork-lift manufacturer based in New Bremen. Honda of America Manufacturing, by comparison, has 15,000 Ohio employees.

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"(Dayton) was a huge, huge, huge GM town 40 or 50 years," said David Kudla, chief executive of Grand Blanc, Mich.-based Mainstay Capital Management and an auto industry analyst. "And now there's nothing."

Kudla grew up in Dayton. His dad, a teacher, worked as a guard at a GM/Inland plant in Vandalia during summers for more than a decade. He earned more as a GM guard than as a teacher with a master’s degree, Kudla said.

Since a $49.5 billion federal bailout a decade ago, GM emerged from bankruptcy to return as a profitable company.

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The company’s Ohio cuts are part of its plan to reduce 15 percent of its 54,000 North American salaried jobs and halting production at five North American plants this year.

A GM spokesman, James Cain, said the company remains committed to U.S. manufacturing but has had to evolve to survive.

“We’re trying to do everything we can,” he said. “I don’t want to make it seem in any way that we’re not sensitive to the impact that it has had on a lot of people. But we have to react to the market.”

The only distinctly GM manufacturing facility still operating in the Dayton area is the DMAX truck engine plant in Moraine, which remains majority-owned by GM. That plant has about 800 hourly and salaried workers.

A separate joint venture with Navistar in Springfield is producing trucks. Navistar remains one of the region’s largest manufacturing employers with more than 1,800 workers at its Springfield plants.

Plenty of auto suppliers in the area still supply GM. But with the closure of their Butler County facility, the brand and most of the tens of of thousands of jobs GM provided in southwest Ohio are almost gone.

‘It’s devastating’

One company’s presence — and then absence — helps tell the tale.

Charles F. Kettering founded the Delco in 1909. He and his engineers are credited for inventing the electric starter, and soon the company was purchased by General Motors of Detroit. Kettering became a GM vice president and Delco became a brand-name world wide.

In the late 1990s GM spun off its parts subsidiary into a separate company, Delphi. At the time, Delphi alone had about 15,000 Dayton-area workers, in plants from Vandalia to Moraine and beyond.

Today, the number of Dayton-area workers at Delphi-legacy plants? Zero.

“It’s devastating,” said Brian Martin, president of United Auto Workers Local 696 in Dayton.

The 696 union hall nestled in a working class neighborhood on Alwildy Avenue was once all-but surrounded by towering Delphi plants.

All that remains are the concrete slabs on which those buildings stood.

“Sad to say,” Martin said, “there’s nothing to see there now.”

The May 31 closing of the GM facility is West Chester on Meridian Way is not caused by the Lordstown closure, but both are part of a company-wide downsizing GM announced late last year.

More than 130 West Chester GM workers have elected to take GM jobs in Flint Mich., while another 100-plus have chosen to move on in their careers, Martin said.

When Nissan recently reduced auto production at its plants in Mexico, GM early this year became the top automaker there, according to a report in the Detroit Free Press.

In recent years, GM has moved production of the the Chevrolet Equinox and Silverado, with GMC Terrain SUVs, to Mexico, UAW President Gary Jones has said.

Bring those vehicles back to the U.S., Martin said, and “You would have an automotive boom.”

“We all know the plan,” Martin said. “You know, Mexico. Keep a presence here, just enough to keep people thinking that we got product being built here.”

Kate Geiger once was part of a large workforce at the GM SUV assembly plant in Moraine. At times, as many as 5,000 workers worked at the plant off East Stroop Road.

By the time GM ended production in Moraine in late 2008, the plant had only about 1,000 workers. Today, Chinese-owned auto glass producer Fuyao Glass America employs more than 2,000 workers in sections of that plant.

Geiger said she thinks about her former co-workers often.

“Whenever I run into somebody (a former GM co-worker), I feel like I’m connected to the most important part of my life for a minute,” she said.

James Cain, the spokesman for GM, said the automaker is sensitive to the pain that plant-product “dis-allocations” cause.

But as GM decision-makers look across their business and the industry as a whole, they see a “profound change” in customer tastes. Americans today are buying trucks, SUVs and crossovers — not sedans, such as the Chevrolet Cruze which Lordstown produced.

For example, Ford has cancelled its Focus model, Cain noted. The shift has been fast: U.S. new-vehicle sales were pretty much split between passenger cars and trucks fewer than five years ago. By 2018, the share of sedans had slipped below a third, according to Wards Intelligence.

Cain called that a “pretty significant” decline, a demonstration of a “wholesale movement” away from traditional sedans.

Ford and Chrysler have largely left the sedan market. Other automakers have resorted to extremely high sales of rental cars or very high sales incentives to sustain sedans.

In the long run, Cain said, those tactics only hurt automakers.

“You have to try to do the right thing if you want to keep hiring and growing,” Cain said.

‘Thank God for the work’

GM says it is committed to American manufacturing.

The automaker said it 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,” the company said in a November statement.

The American market remains the most profitable one for GM, Kudla said.

“Really, for profit, it’s still about North America,” Kudla said.

Many U.S. workers affected by cuts will have a chance to find jobs at other GM plants as it focuses on vehicles of the future, GM says.

Martin said West Chester workers such as himself are grateful for the opportunity to work in Flint or other GM locations.

But the move will not be an easy one.

“You’re displacing four hours away,” Martin said.

But he added: “Thank God for the work. You hang on to it as long as you can.”

About 1,500 displaced GM employees have accepted positions at plants that are “vital and growing,” said GM spokesman Cain. Just under half of those hailed from Lordstown, he said.

‘Do it now’

Former Daytonian David Kudla understands that people may struggle with the fact that GM is cutting jobs while doing well.

But the market is well past what he called “peak-auto.”

U.S. consumers bought more than 17.4 million vehicles in 2015, then broke that record in 2016 by buying 17.55 million vehicles, the seventh straight year of year-over-year sales gains.

In 2017, sales fell about 1.8 percent, to about 17.25 million before rising slightly to 17.27 million last year.

Since 2016, the market has generally plateaued, and sales in China have dropped, as well, Kudla said.

GM CEO Mary Barra’s objective is to “do it now — do the restructuring, do the belt-tightening,” he said.

“It is about being pretty proactive and doing it now, instead of doing it in more of a reactionary mode, which GM and other auto companies have been guilty of in past auto cycles,” Kudla said. “It’s a bitter bill for many to swallow.”

GM’s Cain agreed the automaker is trying to position itself for today and future, for the crossovers and trucks that are popular now, as well electric and autonomous vehicles some expect to grow in prominence.

“The best time to address a problem is always now, not later,” Cain said.

John Heitmann, a University of Dayton professor and nationally acknowledged historian of the American auto industry, thinks Americans need to see GM in a global perspective.

It’s no longer enough to identify GM with a particular place, time or even nation, Heitmann said. Since the 1970s, the “global nature of the business really took over and intensified.”

“Of course, one of the biggest markets is China, not the United States,” he said. “I think we’ve got to think of (GM) as a true multi-national.”

What happened at Lordstown and Moraine has a long history that stretches back to at least the 1970s, Heitmann said. The market for automobiles has become far more global, and every automaker seeks to make vehicles close to where they are sold.

“We can’t think of ourselves in terms of identifying with place as much as we once did in American life,” said Heitmann. “I think place needs to be seen as much more fluid, just as vocation needs to be thought of as much more fluid, as well.”

Working at a plant for 30 or 40 years – that way of life ended in the 1970s, he said.

Said Heitmann: “We should have seen it earlier.”

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GM and Ohio 

1908: General Motors founded.

1909: The Dayton Engineering Laboratories Co (Delco) is founded in Dayton by Charles Kettering and Edward A. Deeds; later is acquired by GM.

1915: Kettering patents his most notable innovation, the electric self-starter for the automobile.

1950s: Frigidaire, owned by GM from 1919 to 1979, maintains a massive assembly plant in Moraine.

1998: A 54-day strike by Delphi against GM begins at a Flint, Mich. metal stamping plant. The dispute is seen as a prelude to a corporate divorce between GM and Delphi. It is the longest GM walk-off since a 1970 national strike.

1999: GM spins off the Delphi parts-manufacturing company into an independent company.

2000: GM employs 26,610 Ohioans at eight manufacturing sites in Ohio

October 2005: Delphi files for Chapter 11 bankruptcy protection.

June 2008: GM announces that it will close its SUV assembly plant in Moraine.

December 2008: The last SUV rolls off the Moraine assembly line.

June 2009: GM files for Chapter 11.

2019: GM announces closure of its Lordstown assembly plant and its West Chester Processing Center. Four GM plants and one distribution facility remain with 4,588 employees.

Source: Dayton Daily News archives, General Motors, Ohio History Central