If GM's Lordstown Plant Closes, Suppliers Would Also Feel The Pressure

File photo. (Tony Ganzer / ideastream)
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Many in Ohio are still processing the news that General Motors could lay off nearly 15,000 workers in North America, ending construction of the Chevy Cruze made in Lordstown in March of next year. 

One of the things economists, workers, and officials alike are concerned about with talk of closure of a plant like Lordstown is how the supply chain might be affected; there are ripple effects to many people and communities.

“It’s terrible news,” says John Colm, the president of Manufacturing Works, an economic development non-profit tied to manufacturing.

“There’s the direct impact of about 2,500 jobs,” Colm says. “But when you consider what’s going to happen in the downstream from the direct manufacturing jobs in the plant, I’m estimating at least $144 million in direct wages lost from the plant workers, and then another 1,100 jobs in the retail sector, and maybe $37 million in retail sales in the region.”

Colm estimates another 1,600 non-manufacturing jobs may be hit by a Lordstown plant closure.

But so much of Ohio’s strength in manufacturing is in a well-integrated supply chain, and a closure of the Lordstown plant would definitely add pressure to suppliers to GM, and others, Colm says.

“It’s not just the Lordstown plant that Ohio supplies. We have suppliers in our network that are suppliers to GM up in Michigan, and Mexico,” Colm says. “It depends on how individual suppliers, how diversified they are.”

After the second shift at Lordstown was cut, companies and jobs agencies across Northern Ohio began sharing employment needs.

And Ohio will be able to offer jobs for displaced workers, though Colm says workers may have to commute longer and face lower wages.

“I don’t think it should be interpreted as a sign where, to quote James McMurtry, that we can’t make it here anymore. Because we can. Even with this loss we’re still the third-largest manufacturing state in the country. But it’s just a dark comment, I think, on the downside of globalization. And if we think this is disruptive, think of what’s coming next,” Colm says.

He points to the difference in how many components might go into a Tesla (Dozens) compared to a traditional combustion engine vehicle. (Thousands.)

“[Think about] what that means for Ohio’s supply chain,” Colm says.
 

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