As GM's Lordstown plant idles, an iconic American job nears extinction

GM has been a critical part of this Ohio town's economy for decades. Now, as GM makes changes to its business, these workers face an uncertain future.

Posted: Mar 6, 2019 1:16 PM


When Felice Robinson was hired at General Motors' Lordstown plant in 1995, she thought the rest of her life was taken care of.

Robinson, who was then in her mid-20s, had been bouncing around a series of low-paid retail jobs when she learned the giant factory down the road was hiring. The assembly line position came with generous health care benefits, an hourly wage more than twice what she had been making at a menswear store, and the promise of a secure retirement — if she could hold on to the job for 30 years.

"It was a whole different world," Robinson, who's now 50, told CNN Business in late February. "I couldn't believe how lucky I was, to be making that kind of money without a college degree."

That world has been evaporating for decades now. On Wednesday, when the Lordstown plant will make its last Chevy Cruze and close its doors, it will get even smaller.

For GM, the move is part of an overall strategy to shift away from sedans and toward higher-margin trucks and light SUVs in an era of low gas prices. GM is also pouring money into electric and autonomous cars, which are still primarily in the research and development phase. And with GM's investment in a ridesharing platform called Maven, the company is looking forward to a future in which fewer people own vehicles at all.

For workers, the transition means uncertainty, dislocation and immersion in a labor market with far fewer opportunities for those without training beyond a high school degree.

As recently as the early 2000s, a job in an auto plant could be a launchpad to the middle class, but those jobs are increasingly rare. During the Lordstown plant's heyday in the 1970s, GM was one of the biggest private sector employers in the United States, with more than 618,000 employees. That number is now down to about 103,000. And the jobs that remain are not all what they once were. Since 1990, wages for US auto workers have declined 18%, adjusted for inflation. Retirement benefits have declined as well. As of 2017, only 8% of factories offered pensions.

Those trends are especially pronounced in the Youngstown, Ohio region, an area about halfway between Cleveland and Pittsburgh in which Lordstown sits. Thirty years ago, about 1 out of 4 local workers were employed by the manufacturing industry. Now, less than half that many are. Since the beginning of the Great Recession, real hourly earnings have dropped by 8% in the area, while rising 11% in the rest of the country.

All that has made GM jobs stick out: Full-time production workers make between $61,000 and $88,000 a year after only a couple years on the job, according to their United Auto Workers union contract, not including additional overtime pay and bonuses. That's well above the average wage in the Youngstown area, which was around $38,000 in 2017.

Unlike during the Great Recession, GM is cutting these jobs — along with about 1,400 more hourly positions at US plants elsewhere — at a time when it's profitable and the national economy is strong. That's an indication that GM sees its future as one with fewer factory-floor workers, not more of them. And for the Youngstown area, losing the last major supplier of the type of jobs that made it a manufacturing powerhouse decades ago is a particularly symbolic blow.

About 400 of the 1,400 people who'll no longer go to work at GM's sprawling Lordstown complex after this week have accepted transfers to other plants, and will keep their healthcare and pensions. Other former workers at the plant, which used to run 24 hours a day, were not as fortunate. As demand for the Cruze weakened over the past two years, its second and third shifts were cut, and 3,000 people were laid off. Many of them won't be offered the same transfer opportunities this latest group will.

GM says that 350 Lordstown workers are eligible for retirement, those who transfer will get $30,000 in relocation assistance, and that it's working to find new employment for anyone who wants it.

"We understand that the decision that was made is very difficult for this community because it impacts people and families," GM spokesman Daniel Flores told CNN Business. "Unfortunately, customers are not buying the product at a volume that would justify continued production. In the end, we made this decision at a point in time where we have the ability to offer opportunities to people who want to keep working for GM."

Robinson thinks she probably has enough seniority to get a placement at one of GM's other facilities, like the metal fabrication plant in Cleveland or the transmission factory in Toledo. She dreads transferring — she'll have to leave her 68-year-old aunt who needs support, as well as the rest of her family and friends, and the town she's always called home. But she has little choice: Despite the strongest US labor market in a generation, the economy is not generating the types of jobs that GM offered her as a young woman.

At least not in Youngstown.

"They have me by a chokehold. There's nothing I can do," Robinson said. "I make $32 an hour. I'm not going to go get a $12-an-hour job. I couldn't survive on that at all. I'm going to get up and go, ride it out, try to get the best gig I can get, and be done with them."

The 'good old days'

The loss of General Motors won't be the first time the Youngstown area took a shock to the heart.

It's been reeling ever since the sudden collapse of the local steel industry in the late 1970s, when competition from cheap imports — and the failure of American steel mills to compete — led to the disappearance of nearly 50,000 jobs over five years.

Through that time, the auto industry became something of a lifeline. The Lordstown plant, which opened in 1966, hired thousands of workers, and thousands more worked in smaller, independent machine shops that supplied auto parts to GM.

The GM plant floated the local government, providing some $2 million a year in tax revenue, said Terry Armstrong, superintendent of the Lordstown school district. The Lordstown school campus, with its spacious lecture halls and a planetarium, was built without debt.

The unionized jobs paid far above market, topping out in the $30-an-hour range, for reasonably humane tasks like installing seatbelt harnesses, securing engine brakes or driving forklifts. Former GM worker Tom Albright, who retired in 2015, remembers being able to do his work faster than the rest of the line and then relax.

"I could get ahead of the job for three hours, and at that point I could go goof off for three hours," said Albright, whose son still works in the plant. "Those were the good old days. It ain't like that anymore. They get every nickel that they can out of that individual working that job on the floor."

But then cracks started to show in the US auto industry, starting with competition from Japanese automakers in the 1980s and continuing with NAFTA in 1994. Employment slid, as work was outsourced to lower-paying suppliers, including plants in Mexico.

The Lordstown plant wasn't immune to the changes that have been affecting the workforce more broadly.

In 2007, as the automakers were bleeding cash, the union accepted the creation of a lower wage tier for entry-level workers, meaning that they made 45% less per hour and got a 401(k) plan instead of a guaranteed pension. After GM's bankruptcy in 2009, workers told CNN Business, the job became harder, with management pressing for less downtime.

"Slowly but surely, they became less and less thoughtful about the people who worked for them," said Robinson. "It's just not the same company that I used to work for. It's so much more cutthroat, and it's meaner. I know that the old GM is gone."

But many in the community still recognize that those jobs feed families, donate to local charities and buy cars. They also generate other jobs: Since manufacturing brings in capital from outside the area rather than just recirculating it, each factory position is estimated to get three or four more people working in fields like healthcare, food service, retail and education.

That's why, last fall, the United Auto Workers local 1112 and the region's chamber of commerce started the Drive it Home campaign — a community effort to post signs, send letters and work with politicians to convince GM to build another product at the Lordstown plant. It was meant to mimic another push two decades ago when Lordstown was in competition with other cities to win another car model to replace the Chevy Cavalier. That one worked, with the help of officials at the plant who joined the effort.

"The one difference is that this time plant management was not interested in participating," said James Dignan, president of the Youngstown/Warren Regional Chamber. "The plant management used to be very engaged locally. But they're losing some of that tie and that feel from the company to the community."

Dignan said they're working to get another user for the plant if GM decides to give it up permanently.

But to the local union workers, getting another GM product is far preferable to getting another company. These are their jobs, and they'll likely still have more protections and higher wages than any other employer.

"We don't want Elon Musk coming in. We don't want Amazon building a distribution center," said David Green, who's been president of UAW Local 1112 since last May. He led another local within the plant in 2007 when the company asked to pay new workers lower wages.

"I supported that because the promise was product and job security," Green said. "Do what we had to do to keep working, keep our communities and our families alive and thriving. It feels like they betrayed us a little bit."

So far, the company hasn't shown its cards — and the uncertainty is what gets to people. Why take a transfer, if it seems likely that Lordstown will get a new car within the next year and you could come back? For that matter, what new employer would take a chance on someone who would bail as soon as Lordstown re-opened? Plenty of people remember how GM re-opened its plant in Spring Hill, Tennessee in 2011 after having shuttered it two years earlier.

That's why, for those who have the option, the choice of whether to go or stay is so agonizing — even though the job had its fair share of hardships.

Tammy Vennitti, 55, was laid off with the second shift back in June last year. She had signed up for a training course in order to keep her supplemental unemployment benefits, and then put those plans on hold in January when GM called back those who'd been laid off to fill in for the people who were being moved out to other plants.

Vennitti applied for a transfer to a plant in Toledo, and she doesn't know if she'll get it or whether she'd take it if she did, given that she lives with her 27-year-old daughter and 18-month-old granddaughter. But she needs the healthcare benefits to pay for the blood pressure pills her doctor put her on during the stress of being laid off for months, not to mention care for a body that took a beating over 24 years of lifting 30 to 40 pounds, 400 times a day. GM's gold-plated insurance paid for a shoulder replacement, carpal tunnel surgery and cortizone shots for a knee that had no more cartilage to cushion her bones.

"For 24 years I've done nothing for this company and this union but bend over," Vennitti said. "This is all I've ever done. I never thought it would come to this."

The jobs of the future

What's next for employment in Youngstown?

The local chamber of commerce said there are 13,000 job openings in the area. Team NEO, an economic development non-profit focused on Northeast Ohio, said there will be strong demand in the coming years for workers in information technology, healthcare and manufacturing. But unlike the manufacturing jobs of the past, which usually did not require education beyond high school, 65% of those jobs will require a post-secondary credential by 2021, the group estimates.

There are plenty of training opportunities, since GM workers get assistance both from the state and the US Department of Commerce through trade adjustment assistance. So far, there's been strong interest in truck driving certificates, an Ohio state official said, since those take only a few weeks to get and pay relatively well.

Some workers saw the end coming early and took steps to prepare. Trish Amato, 43, was hired too late to get a traditional pension, lessening the need to hang on to a GM job. She used GM's tuition benefits to finish her bachelor's degree and get a master's degree in special education.

When she was laid off in 2018, Amato thought about going to the plant at Spring Hill, Tennessee. But she and her partner, whose truck driving job also depends on Lordstown being open, didn't think they could afford the rent in the booming area south of Nashville.

So instead, they're thinking of trading in his big rig for a motorhome and traveling the country, while she teaches online courses from the road — a future that wouldn't have been possible without GM's help in going to school, and that she wouldn't have embraced without GM shuttering the Lordstown plant.

"GM is hard to walk away from because the insurance benefits are awesome," Amato said. "GM gave us a good life. Am I disappointed in what they're doing? For other people, yes. For me, no. If something like this didn't happen, I wouldn't be able to follow a dream."

For the next generation, the question is what kind of wages the new working class jobs will pay.

The local high school has started a training program for the logistics industry, helping prepare kids for jobs in the many distribution centers that are popping up in the area. "That's our way of giving kids a little bit of a leg up," said Armstrong, superintendent of the Lordstown school district, where about 15% of students have parents who worked in the plant.

But, he said: "I don't see them paying what the GM jobs paid."

TJ Maxx, for example, is building a facility that will employ 1,000 people in the area. Job listings for entry-level warehouse workers at its other locations range between $10 and $13.50 an hour.

The GM plant had also been a regular stop for politicians on the stump, from John McCain to Barack Obama, giving kids a sense that their town mattered. On Tuesday, the school held a group photo to support the Drive it Home campaign; students and staff alike wore blue and brought their GM cars.

But after this latest blow, will Lordstown students have confidence in a future in manufacturing?

"It would be really hard to convince many of them of that right now, with the plant closing," Armstrong said. "They're able to make the cars of the future, we just have to make that chance available."

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