No sign of bailout leaves GM town 'on edge'

By Peter Whoriskey

updated 7:56 a.m. ET Dec. 19, 2008

LORDSTOWN, Ohio - Elsewhere in the country, the question of whether the government should bail out U.S. automakers unfolds as a debate over political principles of free-market ideas and corporate responsibility.

But here in the Mahoning Valley, people wonder: If General Motors goes down how will we get by?

The GM plant in Lordstown is one of the few pillars propping up the sagging Rust Belt economy in the small towns and cities in this area of northeastern Ohio. In Lordstown, the plant accounts for more than 70 percent of the tax base. It employs 4,250, paying people some of the best wages around, and sustains an additional 10,000 or so jobs in the companies that supply the GM plant. And as in other places where an auto plant is an economic engine, it's not just auto workers who are worried, but restaurateurs, bar owners, grocers and nearly every merchant in town.

"Oh, my God, people are so scared," said Michael Rulli, whose family has had grocery stores in the area since 1917. "And they'll be on edge until Bush gives us the money."

'Catastrophic'
"Not having GM here would be catastrophic," said Herb Washington, a former star base-stealer in Major League Baseball, who owns 21 McDonalds in the area. "You take that out of here, and what do we have to survive?"

The local talk-radio institution Ron Verb of WKBN has dedicated the past three weeks to the fate of the bailout, first with Congress and now with the Bush administration, and "all seven lines are lit up all the time," he said. Strangers stop GM workers in the grocery aisle to ask what they've heard. And at kitchen tables at night, couples who have lived in the area all their lives talk about whether to at last give up on the Mahoning Valley and pick up and go.

"We talk about leaving," said Bruce Thomas, 40, who puts in windshields at the Lordstown plant, "but everything I ever had came from GM."

His wife works at the plant. So did his dad and her dad. So did two of her brothers. Her oldest brother worked at a supplier.

"Lots of people are talking about going to South Carolina — there's a BMW plant there," said his wife, Jennifer, who raises four children with him. "But I'm afraid that if we go there, there'll be the same crowd of auto workers looking for the same job."

The other issue: Who would buy the homes of retreating employees if the plant goes down?

"My wife talks about picking up and moving," said Russ Pinkard, 41, a team leader in the trim department. "But no one can sell a house as it is. It will only get worse if the plant closes — a lot worse."

Knockout punch?
This area, northwest of Youngstown, suffered a tremendous economic blow when the steel mills began to close during the '70s, the low point being what residents refer to as Black Monday, Sept. 19, 1977, when Youngstown Sheet and Tube let go of thousands of employees.

The local economy has never fully recovered, and the way some here see it, losing the Lordstown plant, which opened in 1966, would amount to a knockout punch.

This week, Forbes magazine ranked Austintown, the Youngstown suburb that is home to the largest share of GM employees, as the fifth-fastest-dying town in America.

In neighboring Warren, home to the second-largest contingent of plant employees, Mayor Michael J. O'Brien said 4,000 of 21,000 houses in the city are vacant. So desperate is it for new residents that the city has offered home buyers incentives of as much as $1,000 to buy a house. Some cost as little as $50,000. In part because of job losses at the auto supply manufacturer Delphi, the city is laying off 20 policemen and 11 firefighters, he said.

"The Lordstown plant is fundamental to the economy," he said.

One of the most frustrating aspects of the potential Lordstown closing is the fact that the efforts of the union and the company at the plant represent, in some ways, an answer to the industry's many critics.

The Lordstown plant builds the small and relatively fuel-efficient Chevrolet Cobalt, and the company had begun investing $350 million at the plant to build the Chevy Cruze, a car expected to be capable of 40 miles per gallon. The union has agreed to have new workers receive $14 an hour — about half of the wage for previous employees — and about 600 Lordstown employees work at that rate. The Lordstown plant is also, partly through the cooperation of the union, one of the company's more productive plants.

"Thirty years ago, this was probably the most radical plant in North America," said local union chief Jim Graham. "We would stop the line if there was a leak in the ceiling. Now we understand that the enemy is not the management. It's the foreign" competition.

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