BOARDMAN - The Lordstown General Motors plant was the "go-to" plant during the company's 2009 bankruptcy and subsequent government bailout, said former U.S. auto czar and ex-Youngstown Mayor Jay Williams.
"I would suggest to you that Lordstown played perhaps a much more critical role in restructuring than perhaps most people realize," Williams told a crowd of hundreds of business people Thursday morning at Mr. Anthony's banquet center in Boardman. "GM Lordstown became a go-to plant."
Williams was in town to deliver the keynote address at the annual Regional Chamber Economic Forecast Breakfast. The Youngstown native served as executive director of the U.S. Office of Recovery for Auto Communities and Workers, commonly called "auto czar," in 2011 and 2012 after being appointed by President Barack Obama. He now serves as deputy director of the Office of Intergovernmental Affairs and is awaiting confirmation on a nomination to head the Economic Development Administration, which is part of the U.S. Department of Commerce. Previously, Williams was Youngstown mayor from 2005 until his federal appointment.
Williams said GM came to rely heavily on the Lordstown complex, its workers and the small car they produce.
"GM Lordstown was a plant that was able to shine throughout the restructuring," Williams said.
It wasn't the first time the value of the locally built small sedan was voiced by experts in the automotive field. In September, as the Cruze hit its three-year anniversary of production, GM's U.S. Vice President of Sales Operations Kurt McNeil, described it as "emblematic of General Motors' progress on many fronts."
The same day, Alan Batey, then GM's senior vice president, Global Chevrolet brand chief and U.S. sales and marketing, called the introduction of the Cruze a "defining moment" for the company's return to profitability.
Glenn Johnson, president of United Auto Workers Local 1112, which represents more than 3,000 workers at the Lordstown assembly plant, on Thursday agreed the success of the small car was "very, very essential to the turnaround of the company." The car launched in the United States in September 2010, about a year after General Motors' Chapter 11 bankruptcy.
"I think the design was very, very popular and very cutting edge when it came out, but when you look at the nuances, we the UAW and GM got it right," Johnson said.
It was the launch of the Cruze that proved small cars could generate profit. Until then, small car production was not traditionally a profitable undertaking, with manufacturers often breaking even or turning a small profit.
GM's bankruptcy rid the company of most of its huge debt, while stockholders lost their investments. Since leaving bankruptcy, GM has been profitable for 16 straight quarters, racking up almost $20 billion in net income on strong new products and rising sales in North America and China. It also has invested $8.8 billion in U.S. facilities and has added about 3,000 workers, bringing U.S. employment to 80,000.
It wasn't just the product that helped drive GM's rebound following the 2009 bankruptcy. Hard work and cooperation of the workforce at the Lordstown plant was also key, Williams said.
In his address, Williams noted the good relationship between the United Auto Workers and management at the plant goes all the way back to the time when the local UAW agreed to a "shelf agreement" in 2001, a labor agreement that was ratified ahead of time in order to guarantee continued operations in Lordstown.
UAW Local 1714 President Robert Morales on Thursday recalled that a restructured labor pact passed in 2007 also helped the company to be more competitive. Morales represents about 1,500 workers in the complex fabrication plant.
"We knew at that time we had to make some changes," Morales said.
Today, that good working relationship continues between labor and management.
"I think we both understand the significance of us working together," Morales said. "Survival is essential."
GM wasn't the only topic of success that Williams discussed in his address to his hometown. He also mentioned growth in the energy sector, including Vallourec Star's new pipe mills, education and advanced manufacturing. The National Additive Manufacturing Innovation Institute, a public-private partnership in Youngstown that is working to perfect new ways of additive manufacturing, or 3-D printing, had gained Obama's support and was mentioned by name during his State of the Union address last month.
Williams noted the high acclaim such a mention brings with it.
"I would not trade my experiences here in the Mahoning Valley for anything else in the world," Williams said. "My experiences here have helped to inform and shape my views, and everything I hope to accomplish is really about the roots I have formed in the Mahoning Valley.
"The future is not without challenges. It's not without head winds, but I am totally optimistic," Williams said.