Smart policy could have saved Lordstown
Posted March 13, 2019 in Press Releases
This past Wednesday, the last Chevy Cruze rolled off the assembly line at the General Motors (GM) Lordstown plant. Two days later, the plant went on “unallocated” status, leaving 1,600 Lordstown people out of a job. They are the latest of 4,500 workers displaced since GM cut third shift in January 2017, but they will not be the last. Already three other companies in the Lordstown supply chain have announced mass layoffs, affecting 750 workers between them.
GM blamed changing consumer preferences, but Lordstown’s fate is largely the result of management choices – including some that may prove harmful to GM’s own bottom line – and bad state and federal policies. The latest brief from Policy Matters Ohio makes state policy recommendations to prevent such closures and help workers who do experience layoffs:
- Extend the Art Modell Law to other businesses. Ohio’s Art Modell law saved the Columbus Crew soccer team. It requires professional sports teams to give at least six months’ notice of intent to leave, and give locals the opportunity to buy the franchise.
- Strengthen state WARN Act protections and enforcement. Ohio follows the Federal Worker Adjustment and Retraining Notification (WARN) act, which requires large employers to give 60 days’ notice to the state and workforce before a big layoff. Some states include smaller firms and layoffs and provide severance pay.
- Support union organizing. Their Collective Bargaining Agreement gives Lordstown workers an advocate and possible recourse. Ohio can strengthen union organizing by remaining a free bargaining state and supporting labor neutrality through procurement and tax incentive policy when workers form a union.
- Strengthen unemployment compensation. Lordstown’s displaced workers will need time and training to regain a foothold. The state legislature must end its attempts to cut unemployment compensation, expand access and better promote programs like SharedWork that provide flexibility to employers during downturns.
- Get smart about tax incentives. Ohio allocated $82 million to GM in 2006 on the promise the plant would stay open at least 30 years. GM reneged on that commitment last week. Ohio and local governments should curb tax incentives, and attach serious strings and strong enforcement to any deals that are made.
“Commentators talk about the Lordstown closure like it’s a weather event that can’t be helped,” said Michael Shields, Policy Matters Ohio workforce researcher. “That’s not true. The closure is a result of GM’s missteps and bad public policy. It’s time to reassess corporate giveaways, hold companies accountable, and pass policies that protect working people.”