Lessons learned: How Lordstown might benefit from Moraine’s GM experience

An Ohio blue-collar community finds itself with a General Motors assembly plant that doesn’t have a vehicle to assemble or a blueprint for the future.

It’s all-too-familiar history for Moraine and Dayton — and the all- too-painful present for the community of Lordstown, where a GM plant faces probable closure.

The news is devastating for the Trumbull County plant in easter Ohio that employs 1,600 workers. Production there is slated to end after March 1.

Montgomery County Commissioner Dan Foley said Dayton should have “empathy” for Lordstown.

“You can’t sugarcoat this,” Foley said. “Communities go through the five stages of grief when things like this happen.”

Dayton-area leaders who dealt with GM’s closure of its SUV assembly plant in Moraine and other parts plants throughout the region in the past 20 years said there are lessons to be learned from what took place here.

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Leaders here say leaders in Lordstown should fight for a new vehicle while they can, then fight to hold on to plant infrastructure once that becomes impossible. Find the right developer, market the property aggressively — and hope for the best.

‘A different environment’ 

Dave Hicks, former city manager of Moraine, helped shepherd a local effort to keep GM’s Moraine plant standing — and then to find a new user there.

Today, a Chinese-owned automotive safety glass producer, Fuyao Glass America, employs more than twice as many people in Moraine than GM did when it shut down production two days before Christmas in 2008.

No one should panic, Hicks said. Or worry about who’s to “blame.”

“It just doesn’t matter,” he said. “At the end of the day, you have to move forward.”

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But move forward how? The auto industry is changing, and so is the way people commute and move from point A to B. Ride-sharing, autonomous vehicles, as well as on-demand driving services, are heralding a sea of change in the decades-old ways Americans relate to their cars, especially in bigger metropolitan areas.

Mike Davis, Moraine development director, said the problems facing Moraine in 2008 and Lordstown in 2018 are not identical. The national economy today is stronger, and GM is not bankrupt.

In 2005, three years before GM closed its Moraine plant, GM posted a worldwide loss of $10.6 billion. Less than six months after GM closed the plant, the automaker filed for Chapter 11 protection.

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Today, GM says it is profitable in all of its core operating segments, with most recent quarterly revenue of $35.8 billion, up 6.4 percent from the third-quarter of 2017. Its net income for the quarter was $2.5 billion.

“It is a different environment,” Davis said.

Still, GM is readying to slash some 14,000 jobs at five North American plants in the U.S. and Canada.

On the same day GM reported $35.8 billion in revenue, CEO Mary Barra emailed all 54,000 salaried GM employees in North America offering a voluntary buyout to 17,700 salaried employees with 12 years or more with the company.

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Kristi Tanner, senior managing director at JobsOhio, the state’s private development corporation, notes that GM has not yet definitely declared that the Lordstown plant will be permanently closed.

“No one knows what GM is planning to do except GM,” Tanner said. “There are certainly ongoing jobs discussions.”

What Dayton did

First, leadership in Dayton at every level aimed at a common goal, said Tanner, who was an integral part of the statewide team who led Fuyao chief Cho Tak Wong to the Moraine facility in 2013.

Dayton’s goals were clear, Tanner recalled: Save the building, bring in a new developer, then attract a new user.

“Every step of the way, you had political and community leaders aligned and in lockstep,” she said.

We “just got literally everyone around the table” and talked about ways to help soon-to-be-laid-off GM employees, giving former workers a place “where they know they can go to get help,” Foley recalled.

There’s a tendency for a company like GM to demolish former plant structures or sell them off as quickly as possible, Tanner warned. But the community centered around a site as large as the Lordstown plant has a stake in what happens there, she said.

Lordstown leaders should work to find a developer with a strong track record “willing to do the right thing for community,” Tanner said.

“That quite frankly doesn’t happen very often,” she added.

Arno Hill, mayor of Lordstown, is adamant that he will fight for his city’s plant.

“We would like to have a new product,” Hill told the Dayton Daily News. “There are so many variables there. We know that GM is making money.”

For now, pursuing a new product should be a first step, Foley agreed.

“Until GM completely shuts the door on that idea, that’s the right thing to do,” he said.

Lordstown has a pair of plants side by side — an assembly plant and a metal fabrication plant, which makes parts for the assembly plant. Hill said he has not heard “any specifics” about GM’s plans for the fabricating plant, but he fears that the fate of both plants is inextricably linked.

“GM has said nothing,” Hill said. “Right now, we’re waiting just like everybody else.”

‘We sprang into action’

Stu Lichter is the California investor who bought the GM-Moraine property in 2011 from the trustee created by a federal bankruptcy court to deal with former GM properties during the automaker’s bankruptcy stint.

A key duty for anyone in Lordstown who cares about that plant: Preserve the infrastructure, Lichter said. The physical plant, with associated assets, could attract a new user.

At one point before Lichter’s purchase, the city of Moraine was getting inquires from “scrappers” asking about the city’s permitting process to take control of the former GM plant and demolish it.

U.S. Rep. Mike Turner, R-Dayton, said city officials called him. He then called the U.S. Treasury and Commerce departments to insist that any buyer of the plant be able to show an economic benefit to the community before purchase.

“I hate to think if that call had never been made,” Turner said. “We sprang into action as a community to prevent the demolition of that building.”

“What happens when these plants close is they are incredible assets with huge infrastructure which can’t be replaced,” Lichter said.

If the RACER Trust (Revitalizing Auto Communities Environmental Response) Trust had sold the GM-Moraine property to a scrapper, Fuyao Glass America would not exist today, at least not that location, he believes.

“The facility itself can be a decision-maker,” he said.

“Without Stu and IRG (Industrial Realty Group, Lichter’s company), the Fuyao project would not have happened,” Tanner said. “That I can say unequivocally.”

There are Chinese companies who may look at facilities like Lordstown, Lichter said.

The Lordstown location will simply remain a vacant brownfield land if the plant infrastructure itself is torn down, he predicted. “The location isn’t good enough that the land there is a huge hot commodity.”

“That site would have been a bad brownfield site,” Hicks said of the Moraine plant’s land between Springboro Pike and Kettering Boulevard north of Stroop Road. “We never would have gotten someone to build a building on that.”

Asked whether Lordstown officials will try to keep the local plant structures standing, Hill said, “We haven’t gotten that far yet. It’s only been two weeks.”

‘The past is no prelude’ 

John Heitmann is a University of Dayton history professor viewed as an authority on the domestic auto industry. If the Lordstown plant — or any former automotive plant — is to have a future, it will be created on personal relationships, Heitmann said.

“I think what the Lordstown people have to be thinking of is … developing these relationships with the Chinese, with others, the personal relationships that will draw people in,” Heitmann said.

He credits former UD president Dan Curran with having longstanding relationships with the Chinese people that helped pave the way for Cho Tak Wong, founder of the global Fuyao company, to investigate possibilities in the Dayton area.

He said new users will be drawn to where their customers and markets are, where unions don’t hold sway, and opportunities exist.

“The past is no prelude to the future,” Heitmann said.

Lichter said Lordstown will ultimately need “someone like me” and a tremendous amount of “outreach” to all partners.

One irony: Rick Wagoner, then the chairman of GM, cited rising fuel prices and a weakened demand for gas-guzzling SUVs and large trucks when he announced in June 2008 the planned closure of the Moraine plant.

Today, full-size trucks and SUVs are ascendant, and the Lordstown plant is endangered by weak demand for sedans — such as the Lordstown-produced Chevrolet Cruze.


What should Lordstown do?

1. Fight for a new GM product at that plant

“We would like to have a new product,” Lordstown Mayor Arno Hill said. “There are so many variables there. We know that GM is making money.”

2. Gain control of plant infrastructure.

“The facility itself can be a decision-maker,” said Stu Lichter, developer and principal of Industrial Realty Group, who bought the former GM-Moraine assembly plant and sold it to Fuyao in 2014. Today, 2,300 people work at Fuyao.

3. Get a good developer on your side.

Find a developer with a strong track record “willing to do the right thing for community,” said Kristi Tanner, JobsOhio senior managing director.

“That quite frankly doesn’t happen very often,” Tanner said.

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