Where Manufacturing Matters

GM Plant Closings, Layoffs Could Affect Cleveland Companies in Many Sectors

Posted by John Colm, WIRE-Net President and Executive Director on Dec 14, 2018 7:00:00 AM

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The recent announcement by GM of layoffs and the potential closing of the Lordstown, Ohio GM plant is doubly unfortunate – affecting thousands of families and their communities but also affecting the entire state of Ohio and the US due to the multiplier effect of the auto jobs directly affected.

“Manufacturing Works has been trying to understand the impact of these layoffs, so that we can understand how they will affect other regional manufacturers and their employees”, said Manufacturing Works president John Colm. He noted “Despite this terrible news about GM Manufacturing Works is engaged with dozens of Cleveland area firms that continue to expand and that are hiring. And InDeed lists about 600 Lordstown area manufacturing openings as well. So there are still bright spots in our manufacturing economy.”

Since January 2017, Lordstown has seen about 4300 jobs eliminated: In January 2017, GM announced its 3rd shift (about 1250 jobs) would end; then, in April 2018 the 2nd shift was eliminated, a loss of another 1500 positions, with the coup de grace coming with the announcement on the Monday after Thanksgiving that the remaining 1500 jobs would be cut. 

The Lordstown jobs are the foundation for significant “down-stream” impacts. Automotive factory jobs have among the highest “multiplier effect” in our economy with 10 jobs standing behind every factory job, according to the Center for Automotive Research. Colm said, “The real impact of all the layoffs at Lordstown is closer to 43,000 jobs lost across the industrial Midwest – mostly in Ohio. The other announced layoffs announced in Michigan and Canada will generate similarly grim impacts.” 

Colm said that Manufacturing Works estimates that the 43,000 jobs lost as a result of the Lordstown closing will be in all sectors of our economy: the direct jobs at GM, both factory and salaried positions; jobs in retail, wholesale and entertainment; transportation, finance and real estate, public administration and others as well. And the impact isn’t limited just to Lordstown, or even Ohio, although clearly Lordstown is ground zero.

Manufacturing Works estimates that rippling out from the 4300 jobs lost at the 6.2 million square foot plant will be the following:

  • Over $368 hundred million in lost direct wages
  • 301 retailers at risk of closure due to the loss of $63.5 million in retail sales, along with the loss of 1900 jobs
  • Over 2700 total non-manufacturing jobs lost
  • Nearly 4400 families affected
  • 2750 total lost jobs that depended on the 4300 GM factory jobs
  • Over 7,000 jobs lost – most in the Lordstown region

In Cleveland there are about 90 automotive suppliers – mostly Tier 2 or Tier 3 suppliers of sub-assemblies or components. Some of these companies no doubt supply Lordstown and employ workers that will be affected. But even accounting jobs can be affected. The impact of GM’s announcement will be felt across the US and Canada.

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About Manufacturing Works: Manufacturing Works, formerly WIRE-Net, is a membership-based, non-profit economic development organization that supports manufacturing leaders to strengthen their businesses, create healthy communities and fuel economic growth. Manufacturing Works has 350 members that employ over 20,000 people across greater Cleveland.  For information, visit www.mfgworkscle.org.

Topics: General Motors, Layoffs, Lordstown, Automotive, Supply Chain

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