GM buys time with deep cost cuts
By LARRY RINGLER Tribune ChronicleFact Box
GM Lordstown Metal Center
to start third shift week early
LORDSTOWN - The General Motors Corp. Lordstown Complex Metal Center is scheduled to start its third production shift on July 28, a week sooner than expected, a union leader said Tuesday.
Dave Green, president of United Auto Workers Local 1714 at the stamping and fabricating factory, said early start is needed to get metal car parts into the pipeline before the next-door assembly plant adds its shift Aug. 4.
About 1,400 workers are being added to staff the extra shift to keep up with demand for the hot-selling Chevrolet Cobalt small car.
LORDSTOWN - Talk about a possible bankruptcy of General Motors Corp. should end with deep cost cuts the automaker announced Tuesday, a local financial adviser said.
Now, comes the tough part of rebuilding a storied American company that's celebrating its 100th year.
''This really sets the tone that GM is serious about restructuring and staying the No. 1 automaker,'' Michael Creatore of Creatore Wealth Management Group in Boardman said about GM's announcement to eliminate management bonuses, reduce its salaried staff, further reduce truck production and do away with its stock dividend.
GM, which was founded in 1908, next needs to figure out how to operate differently, Creatore added.
''They need to consolidate brands, make fewer models and focus on making cars that can compete against the best,'' he said.
One of GM cuts - reducing health care coverage for retired salaried workers - likely will hurt the local economy by trimming the retirees' spending money, Regional Chamber President Thomas Humphries said.
The company's 97,400 salaried retirees will get $300 more a month in their pensions to help offset the cut, GM spokesman Michelle Bunker said. She said she didn't have a dollar figure for the health care reduction.
Humphries said it's hard to know how much it will hurt because it's unclear how many retirees still live in the area. But he said the cost-savings are ''well-thought out. I think we should be optimistic that they're making the best decision they can to try to deal with issues.''
The Lordstown Complex has about 275 salaried workers, a figure that's expected to approach 300 when a third production shift is added in coming weeks so more fast-selling Chevrolet Cobalts can be built.
In announcing the sweeping cuts, GM Chairman and Chief Executive Officer Rick Wagoner singled out the future product at the Lordstown Complex - the Chevrolet Cruze compact car - as one of the company's prime hopes for a comeback.
Scheduled to start Lordstown production in the summer of 2010, the Cruze is being designed as a car that can be sold around the world with minor changes, saving GM engineering and production costs, while providing more upscale features.
Sales of small cars like the current Lordstown-made Chevrolet Cobalt are surging because of $4 a gallon gasoline, prompting the complex to add a third shift of 1,400 workers in the coming weeks, boosting its hourly staff to around 4,300.
Lordstown union leaders said they don't like seeing job losses at truck and sport utility vehicle factories but said GM will emerge from the crisis.
''It's bittersweet because people all over the country are losing their jobs,'' said Dave Green, president of United Auto Workers Local 1714 of the Lordstown Metal Center plant. ''We're in a storm right now, but I think GM is on the right track. Ultimately, people buying American is what will save jobs.''
''It's a shame when plants are closed because you're talking about families, but some of the things they did, like not taking bonuses for a couple of years, shows they're trying to do right things,'' said Jim Graham, president of Local 1112 at the Lordstown assembly plant.
Since union workers have taken concessions over the years, Graham said ''it's only right that management'' do the same.
''When we come out of this, we'll be stronger,'' he said.
