Village looking at impact of GM
Lordstown officials say effect of shift loss unknown
LORDSTOWN — Village officials say it is too early to determine what the full economic impact of the elimination of GM’s second shift will have on village government and the services it provides.
Village Clerk William Blank said it is difficult to project the losses in tax revenues from GM based on 2017 revenues because the company was so inconsistent in its monthly tax payments.
“GM’s tax payments were all over the board,” Blank said. “In addition to the company eliminating the third shift, there were weeks when the plant was shut down. There also was a month when employees received their profit-sharing checks, which affected figures.”
Mayor Arno Hill said GM’s month-to-month tax payments varied by hundreds of thousands of dollars during 2017. Hill also noted the village is hesitant to use 2016 numbers to determine what kind of loses the village may experience because at that time, the plant was going at full capacity with a lot of employees getting overtime.
However, he did say the village lost about $1 million in tax revenues when GM went from three to two shifts.
“The earliest we will be able to make any kind of projection likely will be in late September or sometime in early October,” he said. “It will take a couple months of the plant operating with one shift before we will know the impact.”
Hill does not believe the elimination of GM’s second shift will, in the short term, affect the number of village employees.
Hill said he is not concerned in the short term about the village’s ability to pay its bills and provide services because it had put money aside for its larger projects.
“When GM was going full tilt, we were putting money in the sewer fund account to pay for the east side sewer project,” Hill said. “We have debt, but we have money in the bank to cover it. We feel we’ve done things right.”
In the long term, it could mean more.
“It is not just what is happening at GM that concerns us,” Hill said. “These job losses will have a ripple affect on the companies that supply its second shift. They also will experience layoffs.”
Councilman Ronald Radtka, finance chairman, told council members that over the next several months, he will be working with Blank to determine the economic impact.
Councilwoman Karen Jones emphasized the GM plant was down to one shift in 2010 and eventually bounced back.
“We are just going to have to tighten our belts,” Jones said. “Prior to the elimination of the third shift, there was discussion about tearing down the Kunkel Building. That was delayed. Now it may not happen this year.”
The councilwoman said the village’s department heads have worked hard to control spending.
“They have been very good at spending what we’ve needed to continue providing services,” she said.
The most significant impact of the elimination of the second shift will not be felt immediately because workers will receive benefits related to the job losses.
“Even with the elimination of the second shift, many workers, at least temporarily, will be receiving unemployment and other benefits,” Jones said. “These will help those who are being displaced.”
Councilman Robert Bond added that car sales historically have run in cycles based on gas prices. When gas prices rose, people began buying smaller cars again, he said.
Bond said that council has not met to discuss what options the village has available to address a drop in the amount tax dollars going into the village coffers.