'Hallelujah moment': Poletown, Ohio plants could drive GM's future
Detroit — Two communities seemingly left behind by General Motors Co. could lead the Detroit automaker into its electric future.
GM wants to build electric pickup trucks in the Detroit-Hamtramck Assembly Plant, which has been on life support since the automaker named it as one of four U.S. plants that would be idled. And, GM told United Auto Workers negotiators, the company wants to open its first battery-cell manufacturing facility in northeast Ohio's Mahoning Valley.
That would be near Lordstown Assembly, which went dark after production of the Chevrolet Cruze sedan ended in March. GM has said it intends to sell the plant to Lordstown Motors Corp. — an affiliate of electric-vehicle start-up Workhorse Group Inc. — for it to produce electric trucks there.
GM's electric trucks and battery cells "are products of the future," said Rebecca Lindland, founder of rebeccadrives.com, an auto industry and reviews website. The automaker plans to introduce 20 all-electric nameplates by 2023. "This is battery technology that every manufacturer has to invest in. It's part of the reality of the future of mobility."
Production of the Cadillac CT6 and Chevrolet Impala at Detroit-Hamtramck was supposed to have ended in June, but the plant got an extension until January.
Continued operations of the plant as an electric-truck factory — combined with the ongoing transformation of Fiat Chrysler Automobiles' Mack Avenue Engine Complex into an assembly plant for traditional, plug-in hybrid and eventually electric Jeeps — would be a net positive for the city, said Sandy Baruah, CEO of the Detroit Regional Chamber.
"There are fewer parts that go into an electric vehicle than an internal combustion vehicle," Baruah said. "There's going to be a smaller number of plants operational across the planet in the future than there is today. It is a very good sign that General Motors is indicating their intention is to keep one here in the Detroit region functioning."
GM's plans are part of the $7 billion in investments in a contract offer it presented to the UAW ahead of Saturday night's contract deadline. When the labor union rebuffed the offer Sunday by calling for a strike, GM made its offer public. Sources confirmed to the The Detroit News the plans for the Detroit and Ohio plants.
Details about when operations at either of the plants could begin remain unknown.GM said its overall offer to the UAW included 5,400 new jobs, though it did not specify how many would be for Detroit-Hamtramck and Ohio.
Hamtramck Mayor Karen Majewski said the importance of her city's plant could not be overestimated "in terms of creating jobs, in terms of creating business for local businesses in our local communities, for creating and sustaining a vibrant manufacturing base in the country as a whole."
The plant, which straddles the border of Detroit and Hamtramck, holds historical significance, she said. The Michigan Supreme Court ruled in 1981 that Detroit Mayor Coleman Young could use powers of eminent domain to acquire and demolish the predominantly Polish neighborhood there dubbed Poletown for GM to open its plant on the land in 1985. Some 4,200 residents were uprooted. That precedent was overturned in 2004.
"We all know the history of the plant and the history of the auto industry to the region," Majewski said. "It holds financial importance, symbolic importance, and it provides a livelihood to so many families."
Rep. Brenda Lawrence, D-Southfield, said new product at Detroit-Hamtramck would be a "hallelujah moment" for the community, the companies and the union. But she questioned why the proposal to save the plant is only coming now.
"Do you know the heartache and suffering those UAW workers and their families have been through with months of thoughts of it closing?" she said. "I'm grateful if it happens, but I'm very disappointed it took a union negotiating them to even present it."
David Parnell Jr., a 46-year-old former Detroit-Hamtramck employee who transferred to Flint Assembly in March, said he was frustrated that GM decided to release details about its contract offer to the UAW before a tentative agreement was reached.
GM "wanted the membership to get pissed off at their leaders," Parnell said. "I am very upset. You are in hush mode. It's not supposed to come out until you get a tentative agreement. It's dirty politics."
The city of Detroit did not return requests for comments. Mayor Mike Duggan declined to make a remark earlier this week only to say, "It’s all going to work out."
Retooling for an electric truck at Detroit-Hamtramck could take a year, said Sam Abuelsamid, an analyst at Navigant Research. At the earliest, he estimated an electric truck could launch in late 2021.
GM has said the Cadillac brand will be the "vanguard" of its new electrification efforts. In March, the company said it would invest $300 million at its Lake Orion assembly plant, where the all-electric Chevrolet Bolt is built, to produce new Chevrolet EVs.
The battery-cell plant "is an indication they are ready to move forward to rolling out battery electric vehicles in the next few years," Abuelsamid said. "It means they have confidence that they have some good strong technology that they want to commercialize rather than rely on supplier partners to do that."
GM gets its cells for the Bolt and hybrid Chevrolet Volt from LG Chem Michigan Inc. in Holland on the west side of the state. GM's Brownstown Township plant assembles lithium-ion battery packs. The facility offered for Ohio would build battery cells.
Many automakers have sourced their battery cells from overseas suppliers. The Bolt's battery cells previously came from South Korea. Tesla Inc. bought batteries for its Models S and X from Japan, but when it wanted to produce the mass-market Model 3, it constructed a battery-cell factory in Nevada.
GM's offer is "significant, especially to the Midwest, which most people don’t speak of as technological hubs," Lindland said. "It’s a significant statement and significant commitment that General Motors is trying to make here ... that they believe and have confidence that it has the ability to attract the right workforce and to develop the right technology and batteries to go into future product."
Lordstown workers and leaders at the UAW Local 1112 still want to see GM allocate a new vehicle to its Lordstown plant. But they would welcome the investment GM offered in the Mahoning Valley, which was rocked by the loss of one of its largest employers for years after the steel industry collapsed in the late 1970s and early '80s.
“Our priority is for GM to allocate another vehicle to the plant,” UAW Local 1112 President Tim O’Hara said.
After GM said it would “unallocate” Lordstown, the company said it was having discussions to sell the plant to Workhorse and Lordstown Motors, a company formed in June by former Workhorse CEO Steve Burns. Lordstown Motors is securing financing needed to purchase the plant. GM could not sell the property during the life of the 2015 contract, which expired Saturday night.
“We are still skeptical on it until we see how negotiations play out,” O’Hara said of GM’s offer.
Of the 1,435 employees at Lordstown, 1,381 had transferred to other GM plans as of Wednesday.
Frank Garcia is one of them. The 46-year-old from Poland, Ohio, had worked at Lordstown for 20 years before accepting a transfer in June to the Bowling Green Assembly Plant in Kentucky. Garcia’s wife and children are still in Ohio.
GM’s offer was “good news” for Garcia whose “intention is to try to get back home whenever I can.”
“It made me a little bit hopeful,” he said, adding he is “very disappointed that they did not announce another product in Lordstown."
Since production ended in the rural and industrial village of approximately 3,000 residents, a convenience store and restaurant have closed and the city's income has sunk, Lordstown Mayor Arno Hill said.
"Right now, we're just waiting," Hill said. "Naturally, we would love to have another car, another product, something there. It would be better than what we have now, which is nothing."