By on March 29, 2019

Image: GM

The last Chevrolet Cruze rolled out of Lordstown Assembly earlier this month, with the 53-year-old plant going dark two days later. Some laid-off workers are staying put, waiting to see if September contract talks hold any promise of a future in Lordstown.

While General Motors admits the United Auto Workers was willing to do its part to save the Lordstown Assembly Plant, details of that pact remained unknown. Now, a union official has shed light on some of the concessions the UAW agreed to.

Declining sales of the plant’s sole product spelled the end for the model, and potentially the plant itself. Still, UAW officials felt there was hope for its continued operation, Concessions agreed to by the UAW and a new product would have given the facility a new lease on life, one official claims.

“Everything they asked us to do, we did,” said Dan Morgan, shop chairman of Local 1112 and chief negotiator of the agreement, in an interview with Bloomberg.

In 2017, after GM cut Lordstown’s third shift amid falling sedan sales, UAW officials met with GM brass over the course of three months, eventually hatching out a plan to make Cruze production more profitable. According to Morgan, the union agreed to concessions contained within a “Super Competitive Operating Agreement” — an even more aggressive pact than the one put into action at GM’s low-profit Orion plant.

“We knew we were making small cars,” Morgan said. “We wanted to know what we had to do to stay in the game.”

GM reportedly told the union officials that a more competitive labor agreement could help the plant gain a new product. Perhaps a Mexican-made product would come stateside, some members hoped. The agreement, signed in July 2017 and put into effect in 2018 “allowed GM to bring in contractors, temps and other lower-wage staff to work in the plant,” Bloomberg reports, with the concessions amounting to $118 million a year. Not surprisingly, it proved unpopular with members.

Another part of the deal was the merging of UAW Locals 1112 and 1714 for cost-saving reasons. For its part, GM agreed to amp up the Cruze’s marketing and offer deals on certain options — moves that never happened, Morgan claims.

Cruze sales continued to decline, with Lordstown losing its second shift in June of 2018. Still, by October of last year, Morgan said the Cruze was profitable, which made GM’s November restructuring announcement all the more surprising.

While GM spokesman Dan Flores admits the UAW made concessions, ultimately, “We didn’t discontinue the Cruze because of something the local union did or didn’t do,” he said. “It was a market-driven decision to discontinue the Cruze, and there were no products to allocate to Lordstown.”

As laid-off workers ponder whether to uproot their lives and take positions offered at other plants scattered across the Midwest, some worry waiting for Lordstown Assembly’s potential salvation will leave them last in line — and out of luck.

[Image: General Motors]

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34 Comments on “Union Official: UAW Bent Over Backwards for GM to Keep Lordstown Open, and for What?...”


  • avatar
    NoID

    I really want to give GM brass the benefit of the doubt…but I really can’t.

    They saw the market winds blowing, and they dumped a TON

    • 0 avatar
      NormSV650

      What about the newly redesign 2018 Accord and Camry that are seeing double digit decline in their first year? Civic is right behind them.

      • 0 avatar
        civicjohn

        Civic will do just fine. I own one it’s far from a Cruze.

        I am a victim of the shareholder and bondholder wipeout with the government’s help, I guess I still have a part of me that holds a bit of disdain with how this company has been managed. OK, maybe more than a bit of disdain. It freaking pissed me off.

        So Ms. Barra is touting her new electric Chevy, tossing money here and there and telling the press that everybody will find a new job at other plants…well it just doesn’t add up to anything meaningful. Not that it matters to GM, but I will never buy another share of stock or a bond (my original bonds were from my father’s estate, somehow I ended up with them).

        GM is so far away from delivering products other that SUVs that people want, maybe that will work for a couple of years, good on them for putting $500 million into Lyft, so they doubled that today, and if I were her, I’d sell that crap tomorrow.

        Reminds me of the Alanis Morissette song, “Isn’t it Ironic”.

      • 0 avatar
        Whatnext

        And yet Toyota and honda ae still committed to them. In fact there a slew of models from Japanese and Korean automakers that sell in smaller numbers than the Cruze/Volt and they seem to be able to make a go of it. Only the bumbling North American legacy automakers can’t seem to make a small car, preferring to dimish to just being pedllers of oversized gas guzzlers.

        • 0 avatar
          FreedMike

          American small cars weren’t really that much worse than, say, a last-gen Corolla (which was no treat to drive).

          But Civics and Corollas have been on the market for 40 years now and never had a reputation for being bad; decent small American cars only became a reality after 2000.

          The competition had a huge head start that it never gave up.

          • 0 avatar
            volvo

            I think if the big 3 had put 7 year bumper to bumper warranties (without weasley cop outs) on their cars they might have gotten a significant number of customers back.

            But I suspect they had lots of internal data on parts and subsystems failure rates which told them there was no way they could offer that incentive.

          • 0 avatar
            tonycd

            Freed, GM had an even bigger head start before that, and they gave it up to Toyota and Honda. Repeatedly. Cynically. Greedily. Willingly.

  • avatar
    Detroit-X

    Remember, Lordstown is the plant that GM tried to force into 100 unit per hour assembly line way before Cruze and Cobalt, and Lordstown rightfully objected on the horrific quality results, perhaps saving GM from itself in all assembly plants decades before Bankruptcy-1.

    The first generation of Cruze was a huge step up from the Cobalt and Cavalier is most ways. But GM’s CYA, culture of fear, go along to get along, dysfunctional management doomed the Cruze to cost cutting and quality issues. It was good in performance, not great.

    The second generation Cruze was initially delayed 1+ years because it was UGLY. Nice.

    In June 2015, the news headlines read 45 percent of Cruzes are going to Fleets.

    In 2016-11 headlines say GM claim there is so much demand for the Cruze that a factory in Mexico will add production!!!

    Soon after Mexico starts, Lordstown is cutting shifts. Low demand!

    Sales decline from many reasons, not just the shift to SUVs (1m US sales of sedans still at this time). Just look at competitor sedan sales.

    This is the beginning of the end. GM simply built a legal case to kill Lordstown, but not a moral case. GM management is to blame here. There is no significant reason the Blazer could not been built at Lordstown.

    • 0 avatar
      redapple

      Detroit:

      I thought you were DeadWeight for a minute.

      Your points are right on. Blazer could have been sourced at the toilet door strike plant. You understand GGM has no interest in ‘helping’ USA based plants. It is a full Rush to Hencho.

      PS- Equinox is Hencho as well. 1 plant is there and 1 is in Ontario (?). Equinox content is, I believe 55% Hencho when you figure country of origin of the components.

    • 0 avatar
      FreedMike

      “There is no significant reason the Blazer could not been built at Lordstown.”

      Sure there is – they make more on it when it’s manufactured in Mexico.

    • 0 avatar
      geozinger

      WRT Mexican production: You do realize the only Mexican Cruzes sold in the states were hatchbacks, correct? The sedans for US consumption were still built in Lordstown. Cruze production has stopped in Mexico, too. Folks act as if the whole of the United States will be inundated with Mexican Cruzes. The car barely sold any in the US, a fraction of sedan sales.

      Also, just look at competitor’s sedan sales. Losses year over year. But there’s a reason why they keep trying to sell them, they have no other choice. Facilities are allocated and committed to those products. You can be the last man standing in a shrinking market, but eventually the market will completely evaporate.

      Like Freed says, GM makes more money when they build the Blazer in Mexico.

      I’m from the Valley, but no longer live there. This whole situation has me rather upset as it is a major employer there. I actually agree with you that the UAW has been far more cooperative in the last decade than in the seven decades previously. But one union local, one product alone cannot stop macro-trends.

      Repeatedly people have said GM would get no more bailouts, I see the company doing what it can to avoid another bailout. Sergio called the tune when FCA dropped the Dart/200 and ramped up Jeep and Jeep-related vehicles. FCA has some enviable numbers these days, thanks to the SUV obsession. Ford and GM are just now getting with the program and want in on that too.

  • avatar
    DedBull

    The GM/UAW employees may have a chance to move and follow employment to another GM facility. Even worse off are the employees and owners of local Lordstown businesses that directly supported the facility. Those companies have shut down, and the employees are left to find employment elsewhere.

  • avatar
    CaddyDaddy

    GM v. UAW negotiations. No honor among thieves.

  • avatar
    FreedMike

    Does anyone know if the hourly workers offered employment at other plants got relocation packages?

  • avatar
    volvo

    GM truly was an empire. The Roman empire and British empires took several centuries to decay. GM took a half century. It is very hard to correct a dysfunctional corporate culture.

    IMO blame for this collapse should be shared by both management and labor.

    Perhaps all those bright overpaid MBAs and other suits could have consulted with Audi or Hyundai 20 years ago about how to turn the ship around.

    • 0 avatar
      Peter Gazis

      Ford has the #1 selling Pickup truck in America. Last year GM sold more pickup trucks than Ford. Rumors of its demise have been greatly exaggerated.

    • 0 avatar
      bts

      Being the largest just means they had the most to lose when several new competitors start up offering a similar product with less overhead and no legacy costs.

      Not too mention several different groups all wanting a piece of GM’s profit like the unions and those inside the company itself.

      It’s simply difficult for an organization that’s been around so long to stay competitive.

      • 0 avatar
        HotPotato

        Why though? Building from the ground up is expensive. Occasionally lubricating a well-oiled machine isn’t that hard. I can understand why a new company with a new technology and a new business model, like Tesla, would be in a daily existential struggle: they have to figure it all out as they go along and constantly notch new wins to maintain investor confidence. But GM? All they have to do is build on their successes and learn from their mistakes; all the infrastructure, processes, relationships etc. that they need are already in place.

  • avatar
    Peter Gazis

    Car sales are falling, but crossover sales are up. GM’s small crossovers (Equinox, Terrain, Trax, Encore) are all doing phenomenally well. My guess is they will soon outgrow GM’s current manufacturing capacity. Lordstown should make a bid to build those.

    • 0 avatar
      Detroit-X

      GM has been NOT make money on many crossovers for a few years now (Source: GM Insiders). GM management is fully incompetent.

      So we have this situation, even after the GM bankruptcy-bailout was sold to the US… No money on cars, and no money on many crossovers. Just see the rebates to sell them. “Phenomenally well?” Is that rebate well? Ship to dealers well? Or 4+ year purchase well? Or is that GM stock market propaganda well?

  • avatar
    SCE to AUX

    “Union Official: UAW Bent Over Backwards for GM to Keep Lordstown Open, and for What?”

    Exactly. And you get pretty much the same results if you *don’t* bend over backwards and try to fight the company. Business pressures always win the day, and the union can merely rearrange the deck chairs in an effort to win the best exit deal.

    • 0 avatar
      Detroit-X

      True. But business pressures become great closing ‘pressure’ by short-sighted, cowardly, management. Or put another way, GM has always postured, planned, invested, in ways of the past, to close this plant.

  • avatar
    TS020

    I live in the same city as the GM Holden plant that closed in late 2017. GM took hundreds of millions of dollars of Australian taxpayer money and still screwed everyone here, and now the Holden brand is essentially worthless and its market share has tanked. To be honest, I would have thought that UAW/Canada would have learnt from our mistake (trusting GM).

    • 0 avatar
      Scott

      I can’t speak for the UAW, but from what I have seen/heard in Canada, the union bargains in good faith (or claims to) , the membership ratifies the contract, and then GM “redefines “ what they “actually” meant after the contract is signed, so not actually negotiating in good faith. The company has all the power though, as a worker all you can do is do the best job you can. And try to make sure you have everything in place to exit gracefully when/if it happens. For me at least blindly believing that the plant will be there “forever” is not an option (but unlike many I have worked in other companies and jobs and know the realities of the workplace). I am doing my best to be prepared for my job disappearing, just like I did with every other position I have held. I don’t believe what either the company or the Union tell me, so maybe I am more realistic than most. For now I will continue to do my job to the best of my abilities and get closer to retirement. I am pretty much ready to leave any time now, just need to finish some Reno’s on the house so it is ready to sell quick if needed (so we can relocate to a lower cost/ more relaxed part of Canada)

  • avatar
    BobinPgh

    Now I have to ask a question that I am sure I will get fire for: How has the presence of the Lordstown plant been of any benefit to humanity? Yes, it provided good jobs. But the place displaced farm land and consumed huge amounts of energy and resources to do what? Produce cars that were unreliable and not durable. Is there anyone who really WANTED to own a Cavalier, Cobalt, or Cruze? The Vega was the 2nd worst car GM ever made. If Lordstown suddenly disappeared there would be less power consumption, a place to grow food, people would buy better cars and Earth would benefit. I think the same of Detroit Hamtramack, GM took out a neighborhood people lived in and liked to build a plant that makes cars nobody seems to want. Best thing for GM to do with that one would be to demolish it, clear the land and give it back to Detroit.

    Seriously, I think the only reason the government saved the automakers is to save the jobs, it not like humanity needed their cars that badly.

    • 0 avatar
      SCE to AUX

      Well, the plant has to be *somewhere*, and putting it near the workforce makes sense. The quality of the plant’s products is secondary if people keep buying them (see Tesla).

      But you make a good point about post-closure life for any plant. I’d argue that if a plant remains closed for more than 5 to 10 years then the last occupant should be required to remove it and clear the site. Otherwise you end up with ugly collapsed buildings like the old Packard plant in Detroit.

      • 0 avatar
        BobinPgh

        I guess that’s the answer, as long as people buy a product business will make it. But I knew people who had a “Lordstown car” and the only reason they bought a Cavalier, for example, is because it was cheaper, they bought it used, someone in the family had it. That is, I don’t think people actually set out to buy these cars if they had another choice. I would argue that humanity would be better off if Lordstown never existed.

        I know during the first bailout for Chrysler, one question asked is what has Chrysler done for humanity besides build unreliable gas guzzlers. Saving the company then was done only for the jobs. Humanity was probably better off without the Volare’.

        Which brings up another thing: I myself am guilty of having a job making a product no one needs. My first job was cleaning a Mr. Donut store and making the donuts. I agreed with the counter girls, what we were doing was slave work and how did it benefit humanity? To create a junk food for fat people?!

    • 0 avatar
      WildcatMatt

      The thing about turning a field into a factory is, you can’t just cart away the steel and cement to turn a factory back into a field.

      In most cases, the fertile topsoil has been removed as part of re-grading the land and natural windbreaks and irrigation features have been changed. And that’s before considering any contamination of the remaining soil or water sources.

      In the case of Lordstown, the plant location is such that it could probably be converted to an intermodal facility and/or warehouse hub for Amazon and Walmart. A fraction of the jobs at a fraction of the wages and far less romantic than a wheat or corn field, but probably a better use of resources than to try to completely undo what has been done.

      • 0 avatar
        BobinPgh

        That is why I was recommending GM demolish and clear Detroit Hamtramack. Since it was built in the 80s maybe they were more responsible with the waste and so clean up would not be as expensive and perhaps over 100 years, the site could be a neighborhood again. If GM later needs a large plant, there’s always Lordstown but like I argued before, how has the existence of Lordtown had any benefit to humanity?

  • avatar
    namesakeone

    It’s simple. To the major corporations, communities don’t matter. Customers don’t really matter. Employees really don’t matter. Shareholders matter. And shareholders want short-term results, so they can sell their shares quickly for a profit. After that, the company and all its stakeholders can go straight to hell.

  • avatar
    namesakeone

    It’s simple. To the major corporations, communities don’t matter. Customers don’t really matter. Employees really don’t matter. Shareholders matter. And shareholders want short-term results, so they can sell their shares quickly for a profit. After they do, the company and all its stakeholders can go straight to hell.

  • avatar
    DenverMike

    Do us all a favor, take it all down to bare land. By the time new owners/users bring it all up to current commercial building code, it’d be much cheaper to start from scratch.

    That’s partly why so many historic commercial and industrial builds go abandoned forever.

    GM is clearly dying to build cars where unemployment is greatest anyway. Mexico, right next to their sweatshop labor, parts suppliers.


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