Inside the fight to get GM to reinvest in Lordstown
The GM Lordstown Plant assembled the Chevy Cruz before being shut down.(Photo by Jeff Swensen/Getty Images).
So much can change in the course of one year.
The Lordstown General Motors assembly plant shut down in March after 53 years of production. Thousands lost their jobs and the closure sent the Mahoning Valley reeling.
And now? In just the past month, GM sold that shuttered plant to an electric truck automaker and announced it would soon build a new electric vehicle battery factory in the Lordstown area. Lordstown Motors Corp. will build EVs in the same space that GM once used to build Chevy Cruzes and Pontiac Firebirds.
On Thursday, GM announced a joint venture with South Korean company LG Chem to invest up to $2.3 billion into a new EV battery plant. The project is expected to break ground next year and create 1,100 new jobs.
Meanwhile, a nearby business incubator now operates an EV battery testing lab and institutions like Youngstown State University are in talks to help with research development.
The economic landscape of the Valley is rapidly changing, said state Sen. Sean O’Brien, D-Bazetta, whose district includes Lordstown.
“We’re no longer known as the rust belt,” O’Brien told the Capital Journal. “We’re now the future belt.”
All signs are pointing to the Valley becoming the EV tech hub of not just the state, but the whole world, O’Brien and others have said this week.
The $2.3 billion investment announced Thursday followed many months of negotiating from a wide array of political and economic development officials. The news was long awaited, but within hours, O’Brien was already looking ahead — this is part of a broader domino effect encompassing the whole Valley, he believes. It will take more development to recoup the jobs lost at Lordstown Assembly, but O’Brien thinks the area is turning around.
“There’s a lot of potential,” he said on Thursday afternoon. “I think it’s going to be much more than that.”
O’Brien’s Republican colleague, Michael Rulli, R-Salem, agrees.
“Northeast Ohio is on the rise,” Rulli said in a statement. “It didn’t happen overnight, but we are rebounding from tough times and our future looks bright.”
In addition to the electric vehicle-related projects, a long-anticipated $170 million regional distribution center for TJX Companies Inc. is going up in Lordstown and expected to be completed in 2020. The center is for a TJX subsidiary called Home Goods Inc.
According to the Youngstown Business Journal, TJX expects to create 1,000 full-time jobs at the site by the end of 2024 and officials have projected payroll at between $27 million and $30 million.
What it took
It is easy to think of GM’s impending return to Lordstown as being an olive branch extended to a community devastated by the company’s 2018 decision to close its local plant.
That narrative only tells a small part of the story, officials say.
To hear the area’s congressman tell it, there is a bigger picture to this reinvestment. U.S. Rep. Tim Ryan, D-Niles, said many people have worked hard over the past year to position the Mahoning Valley to be a good environment for “next-generation jobs.” This includes local officials, fellow legislators at the state and national level, economic leaders, union representatives and most of all, Ryan said, the skilled workers.
“For a long time in our community, we were chasing smokestacks, chasing things that were on the decline,” he said, drawing a contrast with investments into new technologies like electric vehicles.
Ryan said the Valley is now positioned to “start dominating the new economy like we dominated the industrial economy 50 years ago.”
That work began almost immediately after the Lordstown Assembly closure was announced. In March, President Donald Trump said on Twitter that GM “let our Country down” and that he was “not happy” that the plant was closed. He urged GM to take quick action to reopen or sell the plant.
The United Auto Workers Local 1112 partnered with the Youngstown/Warren Regional Chamber of Commerce for an initiative called “Drive It Home Ohio.” The stated goal was to “urge General Motors to support growing their investment at the Lordstown Complex.”
Gov. Mike DeWine and other Ohio political figures kept in close contact with GM Ceo Mary Barra throughout 2019. When it became clear that GM would not be reopening its Lordstown Assembly plant, talks turned to a possible sale to an electric truck manufacturer.
These officials then learned GM wanted to build a new plant for EV battery production. O’Brien, the area’s state senator, described a monthslong, bipartisan effort to convince GM to reinvest in the Mahoning Valley.
“We had to compete with other states that were vying for it,” O’Brien said. “We fought like hell to get this new product.”
The state senator credited the governor’s office, JobsOhio and his colleagues in the statehouse for working to get this done.
“It really was a team effort,” he said. “It wasn’t a Democrat or Republican issue. It was, ‘what’s good for Ohio? What’s good for the Valley?’”
Ohio had some advantages over the other states besides the widespread, organized lobbying effort. For one, GM was already familiar with the Northeast Ohio area and knew of the presence of a skilled workforce.
“We’re hungry. Our area of the country, our area of the state is very hungry for opportunity,” Ryan said.
JobsOhio, the state’s nonprofit economic development arm, was involved with these discussions from the beginning. JobsOhio, which is a private corporation, has not yet disclosed the incentives package being offered to GM and LG Chem.
“The joint venture between GM and LG Chem will bring an advanced battery production facility to Ohio that will keep our state at the forefront of the automotive industry as it continues to evolve,” said J.P. Nauseef, JobsOhio president and chief investment officer. “It not only reorganizes Ohio’s legacy in the automotive manufacturing, but indicates the beginning of our bright future in advanced battery production.”
Ryan also credited BRITE Energy Innovators with having played a positive role. Brite, an energy-focused incubator, was involved in some of these early discussions with both Lordstown Motors and GM.
CEO Rick Stockburger told the Capital Journal his goal was to let these larger companies know of the services his incubator could provide to them. While GM has developed an EV battery lab in Warren, Michigan, Stockburger pointed out that BRITE operates its own independent battery testing lab in Ohio’s Warren, just minutes away from Lordstown.
Youngstown State University was among the higher education institutions to get involved. YSU President Jim Tressel told The Detroit News in October that he wanted his institution to play a research development role in the project, giving students of the Valley a chance to explore careers in the electric automotive field. Spokespeople with YSU did not return this reporter’s request for more information about the university’s involvement with the GM negotiations and its plans for 2020 and beyond.
‘An avalanche effect’
All of this together — a widespread lobbying campaign; the Valley’s skilled workforce; the possibility of a research partnership with an area university; the presence of a nearby business incubator focused on electric vehicle technology; the recent introduction of a new EV truck plant at the former assembly site; and a financial incentive package from JobsOhio — helps to explain why GM is seeking to return to Lordstown.
“You look at the synergies,” O’Brien said. “It produces an avalanche effect. We have the research and development, the funding, the programs. It becomes a snowball, which becomes an avalanche.”
Stockburger with the BRITE business incubator saw that firsthand on Thursday. In the hours after the GM/LG Chem deal was announced, he heard from numerous companies, many of them suppliers, wanting to know how they could relocate to the Valley.
A few other universities, such as Case Western and Carnegie Mellon, also inquired about getting involved in the project.
“We’re all in on this,” Stockburger said. “We hope to be beneficial to the process.”
This area has always been on the forefront of vehicle innovation, Stockburger pointed out, ever since the first Packard rolled off the line in Warren back in 1899. Why shouldn’t the area be on the forefront of electric vehicle and embrace a new status as the “future belt” of America?
That’s the view of DeWine and Lt. Gov. Jon Husted. Husted was in Michigan on Thursday with the CEOs of GM and LG Chem to finalize the deal.
“With electric vehicles changing automotive manufacturing, (Thursday’s) announcement is an important win for Ohio, because we are now positioned to play a larger role in the future of the automotive industry,” Husted said in a provided statement.
GM plans to introduce a battery-electric truck by 2021, part of a goal to roll out nearly two-dozen EV models around the world by 2023.
“Things are starting to move in a good direction,” Ryan said. “I feel very, very optimistic in the direction the community is moving in now.”
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