GM plant closings will hit parts suppliers far and wide
February 4, 2019 by John Seewer The Associated Press
February 4, 2019 – The sting from a major restructuring at General Motors and its planned closings of five North American factories in the coming months is putting thousands of jobs at auto parts suppliers at stake, as well.
While GM expects nearly all its U.S. blue-collar workers whose jobs are being eliminated to have an opportunity at relocating to factories that are adding jobs, that won’t be the case for many in the supply chain who make parts, drive trucks, work in warehouses and keep GM’s plants operating.
For most of them, there is no safety net.
“There’s nowhere to transfer. They’ve got nowhere to go. They’re just out of work,” says Dave Green, a union leader near Youngstown where GM in early March plans to shut down its factory that makes the Chevrolet Cruze compact car.
GM’s labour agreements guarantee its workers transfer rights and relocation money, but that’s not true for the wide majority of suppliers, even where the workers are represented by unions.
“We’ve been lost in the shuffle,” says Brian Shina, who lost his supplier plant job when GM cut a shift at its Lordstown factory in May, months before announcing plans to close it. “We don’t have any leverage here.”
The dominoes already are starting to fall. A plant that makes seats for the Cruze and another business that does logistics and warehousing work for GM in Ohio will close in March, too. Just three years ago, those two had a combined 800 workers.
Green has compiled a list of more than 50 other businesses whose work is tied to the Ohio assembly plant. But it’s difficult to know how many could be forced to cut jobs because many do work for other auto plants and industries.
Despite varying estimates, some economists project that for every auto plant job that is lost, three or four additional positions are eliminated. Research shows that auto plants, and “manufacturing” in general, create more spinoff jobs than other industries.
“That’s the bigger part of this,” says Green, who plans on attending President Donald Trump’s State of the Union address Tuesday at the invitation of Democratic Rep. Tim Ryan, whose district includes the plant.
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Trump, who has promised to revive manufacturing in the Midwest, has been highly critical of GM’s announcement, threatening that his administration was looking at cutting GM subsidies, including for electric cars. It’s an especially thorny issue for the president, who won over a surprising number of Democratic-leaning union workers during his first campaign.
There’s still a chance some of the factories targeted by GM could be revived during upcoming contract negotiations with the United Auto Workers union, which has promised to fight the closures. Those include assembly plants in Detroit and Oshawa, Ontario, and transmission plants in Warren, Michigan, and near Baltimore.
Suppliers closest to factories that end up shutting down tend to be hit hardest because they’re usually more reliant on those plants than those farther removed with a broader customer base, says Albert J. Sumell, an economics professor at Youngstown State University.
Workers at a parts plant in Whitby, Ontario, walked off the job in January to protest GM’s decision to shutter its Canadian plant while another nearby supplier plant announced it will be forced to close.
Many of the parts that flow into the transmission plant near Baltimore come from other states, including South Carolina and Tennessee, and some are delivered from Mexico and Canada, says Guy White, a UAW shop chairman in Maryland.
“There’s all sorts of suppliers. It’s huge,” he says. “We get stuff from all over the world.”
Other jobs that are directly tied to the plant are more likely to be in jeopardy, including those who supply its machines or sort parts, White says.
Those who study the auto supply industry say it’s too early to know the full impact of GM’s transformation away from cars to focus on trucks, SUVs, and electric and autonomous vehicles.
Some suppliers expect to withstand the potential losses from GM because they have made moves to diversify their customer base in the years since the Great Recession rocked the auto industry.
Jamestown Industries, a small operation that supplies front and rear bumper covers for the Cruze, hopes its efforts to secure new business will allow its Youngstown plant to keep going.
The idea is to add work in warehousing, logistics, and packaging outside of the automotive industry, says Lawrence Long, the company’s vice-president of development.
But the plant is down from three shifts to one and now is poised to lose its biggest customer. Melissa Green, who has worked there 14 years, isn’t optimistic and making plans to switch to a career in nursing.
She’ll be able to go to school for free through a state program that assists laid-off workers but still will need another job once her unemployment benefits run out.
What also worries her is what will happen to the older workers who are just shy of retirement age.
“A lot of them don’t know what they’re going to do,” she says. “Hopefully they can find something because they have to survive.”