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GM plant closing tears at Ohio community

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#1 ·
GM plant closing tears at Ohio community
By Marisol Bello, USA TODAY
ONTARIO, Ohio — When General Motors, the biggest employer in town, laid off 400 workers in December, it was like a boulder falling into a very small pond.

April and Rick Allison lost their jobs stamping out doors and other car parts. They plan to leave to find work.

Their departure means their landlord, Angelo Sorrenti, is worried about his business, so he's holding off buying a new pickup.

That hurts Graham's Auto Mall, which has laid off sales manager Steve Brown.

Now Brown can't make his regular contribution to the United Way.

The United Way has reduced donations to charities such as Friendly House's after-school and summer program for low-income children.

Friendly House is increasing its summer day camp fees. Single mom Pamela Hall worries if that keeps up, her 9-year-old daughter Courtney will have to stay home.

The struggles facing the people of Ontario and its neighboring communities show how the 400 layoffs ripple far beyond the gates of the GM plant, where 860 people still work. The stories reveal how job losses at a plant tear the web that binds the workers and their neighbors.

And Ontario is just one of 12 cities facing the bleak prospect that its GM plant will shut down in the next two years.

President Obama promises a stronger, healthier future for the restructured GM and Chrysler, but the White House acknowledges that it means downsizing. For Ontario and its 5,200 residents, already under strain, downsizing means losing the remaining 860 jobs.

"Something like this can devastate a little town," says Kim Hill, assistant director of research at the Center for Automotive Research in Ann Arbor, Mich.

More layoffs will ripple across Richland County, where the recession already has led to a 13.1% jobless rate, well above the state's 11.1% and the nation's 9.5%. Situated between Cleveland and Columbus, the county's biggest community is Mansfield, an industrial city next to Ontario with a population of 50,000.

Ontario, a mix of farms and newly built suburban mini-McMansion subdivisions, has grown into a retail hub for the county with shopping strips and big-box stores. That's largelythanks to the GM plant.

Hill says that for every job cut at a stamping plant like the one here, three more could be lost as the facility no longer buys supplies or hires contractors for services, such as cleaning; retailers and restaurants see fewer customers; and local government receives less tax revenue.

Ontario officials are bracing for big drops in income and property taxes as jobs disappear and people leave. The largest chunk of the city of Ontario's revenue, about 44%, comes from a tax on wages. Revenue from the 1% tax — $3.7 million last year — goes toward police, street repair and other services, Mayor Ken Bender says.

About 40% of that tax was a product of jobs at the GM plant. This year, even before the plant shuts down, the city expects to collect at least $300,000 less.

Bender says the plant closing will have "a catastrophic effect" on the police force and other services. Already, the city has laid off eight people from a workforce of 56, including two police officers and two dispatchers.

Bender doesn't know how bad it will get, but he says less revenue and more layoffs are likely.

Politicians and area residents are petitioning GM to keep the plant open, but the company says the closing is final.

"There's not really any alternative," says GM spokesman Tom Wilkinson. "In order for the company to be viable going forward ... we need fewer plants. That's the reality."
Full text here: http://www.usatoday.com/money/economy/2009-07-20-gmtown_N.htm
 
#2 ·
GM plants scheduled to close

City Plant status Population GM workforce

Pontiac, Mich. Closing by October (assembly) 66,095 1,470

Spring Hill, Tenn. On standby (assembly) 26,230 2,671

Wilmington, Del. Closing by end of July (assembly) 72,592 1,060

Grand Rapids, Mich. Closed (stamping) 193,396 912

Indianapolis Closing by Dec. 2011 (stamping) 808,466 762

Ontario, Ohio Closing by June 2010 (stamping) 5,200 860

Livonia, Mich. Closing by June 2010 (engine) 91,220 118

Flint, Mich. Closing by Dec. 2010 (North components) 112,900 646

Ypsilanti, Mich. Closing by Dec. 2010 (powertrain) 21,464 1,364

Parma, Ohio Closing by Dec. 2010 (components) 77,947 1,026

Fredericksburg, Va. Closing by Dec. 2010 (components) 22,818 81

Massena, N.Y. Closed in May (castings) 10,539 35
http://www.usatoday.com/money/economy/2009-07-20-gmtown_N.htm
 
#4 · (Edited)
It hurts in Ohio but it helps in Alabama and Georgia. Did you see story about new kia plant opening in Georgia. It created so many jobs that those people do not feel any receesion. Some people get hurt others get rewarded it is simple as that. Ohio and UAW become uncompetitve so other manufactures move to southern states where labor force and taxes are more friendly. If UAW was not gready Hyundia and other car makers would open plants in midwest not down south. So in a way they dig their own grave.
 
#10 ·
Spring Hill's population went from 1,464 in 1990 (SOP for the SL series Saturn) to a city-estimated 25,872 in 2008.

This amazing growth can be almost entirely attributed to GM, either directly or indirectly.

The city has no other significant industry. But there has been an influx of commuters in recent years looking for cheaper housing and good schools.
 
#12 ·
As a Richland County resident I do not feel sorry for Ontario and Mansfield relying upon a handful of factories for tax revenues. There is a local mentality that only large factories like GM are wanted. That has created a community which is driving away the best and brightest of children upon graduation. No story trying to evoke sympathy for the local governments is going to change the problem of watching jobs leave forever while hoping for a large factory to fall from the sky.

Graham Auto Mall has just completed 2 new showrooms, one for Toyota-Scion and the other for Chevrolet-Cadillac. The grand openings for both showrooms have been over the past few weeks, yet that doesn't fit the sad story they are trying to sell here. They built these facilities while watching retailers in the area suffer from the downturn, seemingly ignorant that the downturn could hit their business too.

I do think it is unfortunate that many in this area have lost their jobs, or will be. I also think it is more unfortunate that a great area like this (close to Lake Erie, Cleveland, and Columbus) is being led by people looking back on 'glory days' instead of trying to build a future for every one.
 
#14 ·
This problem isn't only the result of auto manufacturing jobs being lost - the same occurs with any company/community that experiences massive layoffs.

I feel for the people being impacted, but this is sometimes what happens when you have all your eggs in one basket - especially if people get greedy and start taking advantage of whoever is holding the basket.
 
#15 ·
We may think of a town like Ontario being like Flint - a place in decline for the past 30 years. It is not, however. Ontario is a prosperous town that was only incorporated in 1958. The area is large and wealthy enough to support a shopping mall. This just goes to show that every place gets hurt, not just the archetypal Rust Belt old-industrial cities.
 
#18 ·
For every GM job that is lost it effects 10 other people. Add up the number of GM jobs lost along with Ford and Chrysler in the last 20 years and times that by 10. It doesn't take much of a brain to see why the USA is in the shape it is in. Millions of jobs left the USA for Mexico, China, and any number of places that we can't even pronounce. The price of products did not drop, the taxes paid in to the local areas dropped. People can sit around and call the Union Bad all day long , but GM, Ford and Chrysler and any number of manufacturers made big profits when they had Union workers. Plus the cities and towns had people that could afford to pay Taxes, buy houses, and durable goods. Kiss that goodbye , and get ready to work for peanuts.

DESIGN IT HERE, BUILD IT HERE, SELL IT HERE, PROFIT HERE
 
#21 ·
This story is a great illustration of the ripple effect. You can't really point your finger at one particular culprit though as many different factors were to blame for this. Bottom line for nearly everything is greed somewhere along the line.

I live in mid Michigan and I'm watching the state crumble all around me. Fortunately I'm not employed in the auto industry, but it kills me to watch it slowly happen.

I really wish people would open their eyes and see how their decisions directly and indirectly affect their fellow Americans. Sure maybe the South is propsering somewhat from this but at what cost? The midwest is going to be a no-mans land in another decade at the rate things are going. Projected 20% unemployment on the way. People are moving away and looking for work elsewhere.

Sorry to rant but it gets me a bit emotional
 
#31 ·
Let's put this issue right back into the lap of GM and its successor, Government Motors. Had the people in management done their jobs - yes, Wagoner and Putz included, GM would be in a much better position than it is today - bankrupt. The only people who are to blame for the failings of GM are those who worked for them - from the indifferent and greedy assembly-line worker to the obtuse and overpaid manager.

One cannot fault any American who chose a Hyundai or a Honda or a Toyota or even a Ford over a GM product. GM didn't close the deal - they didn't earn the business. And GM couldn't even give their vehicles away - that is how bad the reputation of GM was and it won't be any easier for Government Motors.

So, lets cease with the sob stories about the workers and communities impacted by the plant closures. This is life. This is business. You aren't guaranteed squat as an American. Pick yourself up by the bootstraps and make do with what you have - and if you want more - solve your problem on your own and make something of yourself!

In hindsight, I wonder how many of those affected workers lived well under their means and saved for a rainy day?
 
#33 ·
Another day, another batch of union bashing.

People are missing so much.

Take your eyes off the cars, see how capital is leaving the country. See how these wonderful southern non union plants are being built on tax dollars. See the gap between rich and poor is growing.
 
#36 ·
The Southern states have gotten great ROI on their investments to have manufacturing plants built in their states. Many Americans have benefited greatly.

Personally - I dont mind paying extra provided I am getting something for my money. Many Electricians are Union employess who get excellent pay and benefits. Companies *want* to hire these guys due to the quality and efficiency of work. They are *worth* the 15% premium over non-union Electricians in most cases.

Lets look at the Auto industry. When times were good the American consumer was helping to fund a high quality of living for an auto worker - Yes, the CONSUMER was funding this and found value paying for what they were getting.

Paying more has an impact on the consumers quality of life as they are having to give up more of their pay to get a vehicle.

Heres where the US Auto Industry didnt get it - as the cost to design, test, and build a vehicle went up in the US - the quality has gone down. Call it what you want - but you began asking the CONSUMER to forgoe more of *their* quality of life to help fund the Auto workers standard of living which in many cases was *alot* better than most americans - and in return they were getting *less* value for their dollar.

As the US Auto industry continued to provide low ROI to the consumer they went places that provided more value for their dollar. Over decades the US Auto Industry still didnt get it and eventually *alot* of Americans were making a living building foreign cars and making a good wage and providing the Consumer with a product they percieved to be of higher quality for their dollar.

So - there you have it. You can argue that all the UAW wanted was a good quality of life for its workers - Unfort the entire US industry forgot that the consumer was the one footing the bill and foregoing their quality of life spending a large amount of money on a vehicle. That is one reason you may find many not having sympathy as alot of consumers spent their hard earned cash only to find many defects, bad intake gaskets, bad transmissions, low quality of materials for DECADES.

$14 with benefits is an 'ok' job. Get back to providing the best value for the consumer and they will pay extra $$ for American designed/made cars. But you cannot expect all Americans to sacrifice their quality of living for substandard products. You also cannot ask the consumer to pay 15-20% more for a vehicle just cause its built in the USA. If you disagree then I hope you never shop at Walmart or any other discount store as you can find almost everything you need form US vendors at a price premium (except an iPod and TV I guess)


It will take years to gain this confidence back - just like it took years to destroy it.
 
#34 ·
Putting the union vs. non-union argument aside for a minute. There are fundamental problems with what is going on here.

Now it is no secret that states like Mississippi and Alabama have offered foreign automakers huge incentives to open up shop in there states. Which normally is fine. It is there business. However, if you take a minute to look at the charts provided at the below link you will see that year after year those states constantly take more from the federal government then they give. In states like Michigan and Ohio the opposite is true.

So essentially the people(automakers, and auto employees) of the states of Ohio and Michigan are indirectly subsidizing the incentives that are given to companies that compete directly with them. Why are those states allowed to give such incentives when they don't even pay there fair share of federal taxes? Meanwhile, the poor people in Michigan are forced to pay money that is indirectly going to companies that are trying to put them out of work! Am I the only one that has a problem with this?

http://www.taxfoundation.org/research/show/22685.html
 
#35 ·
Those of you bashing the unions are doing a great job of showing your ignorance to the rest of us. Wake up morons. Don't you get that when people build cars for less wages it lowers the conditions for everyone else? Don't you get that many towns not only employed people in GM plants, but these people paid taxes, bought more GM cars, put their kids through college and re invested in the local economy because they could afford to? How dumb can some of you be? Uh yeah it's the unions fault, all of it. How stupid. When people make more they spend more. You know that thing called the stock market? It's driven mainly by people spending money. No car company has yet to offer a discount on cars build in plants that didn't pay UAW scale. Did any of you bother to look and see that the most productive and safe plants in North America have been UAW plants? I wonder how those cars build themselves with all those lazy union workers sitting around all day? Oh yeah, Honda has one of the worst auto assembly safety records in the U.S. and yet they don't deal with the nasty greedy UAW. Yeah it really sucks to afford a decent life and go home with all your fingers in tact and have luxuries like a house and car. As someone mentioned earlier, the UAW had some of the most benefits at the time the car companies were the most profitable. How? Easy, the cars they built weren't ruined by management. Some of you act as if the assemblers design the cars. They build what GM tells them to build, crap or awesome it's their job. The way something goes together - engineers doing, not assembler. If GM has been run into the ground it's not been the assemblers earning a decent, not rich wage, that are at fault.
 
#37 ·
Question - has the UAW ever worked on providing a mechanism in their contract for improving the vehicles GM was working on?

I dont know the answer - but with the clout over the years and seeing the UAW worker base disintegrating I figured it might be something worth fighting for in the contract negotiations if possible.
 
#43 ·
Very good question.
 
#57 ·
HD starting making crappy bikes around the same time GM started making crappy cars. The difference is HD made necessary changes to improve their bikes, and GM continued to make crappy cars. I've probably bought my last GM cars because of their crappy quality (both are new cars), but will continue to buy HD bikes because the quality, and yes, the image as well.