Ohio's Mahoning Valley angling to become electric mecca for autos
Once United Auto Workers members finalize their deal with General Motors Co., Lordstown Assembly will no longer produce Chevrolet cars. But the economically troubled Mahoning Valley is poised to fight back and build its own remake.
The corner of northeast Ohio steeped in manufacturing is angling to stake a claim in Auto 2.0 by becoming a next-generation mecca for automotive electrification. GM is negotiating to sell its sprawling Lordstown complex to an electric-vehicle startup, and it is moving to form a joint venture with LG Chem Ltd. to build a battery-cell manufacturing operation in the region, according to a source familiar with the partnership.
It hasn't always been this way for the Steel City and its surrounding two counties. For decades, the valley's steel furnaces burned through the night, their fires lighting the region's skyline and shaping a way of life for the people who live there.
"We have an opportunity to excel at what we have always been good at," said Rick Stockburger, president and CEO of Brite Energy Innovators, an energy incubator in Warren, Ohio. "At the end of the day we are still building cars … we are still creating value. That's what the Mahoning Valley has always been able to do is create value whether it’s with steel production or automotive production."
This time, leaders in the valley say, will be different. Instead of following big industry and reaping whatever rewards it is willing to bestow, the region is coalescing around a vision of leveraging its heritage to become a hub for electric-vehicle development and manufacturing. And that answers a key concern voiced by UAW bargainers in talks with GM: how to manage the transition to electric vehicles and the implications for union jobs.
When the steel industry collapsed in the late 1970s — thousands of jobs were eliminated in a single week — GM's Lordstown Assembly remained. Opened in 1966, it reshaped the valley's identity into an auto town, its grit, resilience and hard-working attitude a legacy of the steel mills.
Parts of the valley are still reeling from the loss of the GM Lordstown complex. But others are celebrating what could be a triumph for a region that's been reinventing itself for decades and building on what it does best: making things together.
The valley's incubators, Brite and the Youngstown Business Incubator, known as YBI, are central to the area's transformation from rust belt to tech belt, officials say. YBI's push to become an additive manufacturing incubator has spurred interest from additive manufacturing or 3D printing startups nationally and internationally. America Makes — the Obama-era National Additive Manufacturing Innovation Institute hub in downtown Youngstown — also has helped.
Up the hill from YBI is the growing Youngstown State University, another critical partner in the region's transformation. President Jim Tressel is pushing to ensure the university has a seat at the table in becoming a part of the auto industry's electric future.
"There is just a buzz around here," Tressel told The Detroit News. "We have this tremendous opportunity. We have to appreciate it. We have to believe in it, and we have to roll up our sleeves and make it successful."
This summer, Tressel and other stakeholders in the valley met with representatives from Lordstown Motors Corp., the electric startup negotiating to purchase GM's sprawling Lordstown complex. Lordstown Motors wants to make the complex its headquarters, research and manufacturing site for its electric commercial pickup truck called the Endurance, named after the people of the Mahoning Valley. The company plans to initially hire 400.
"I have been in a lot of locker rooms where we didn’t like the score but we had to figure out how we were going to change the score," said Tressel, a retired football coach who led both YSU and Ohio State University to national championships.
He sees the potential investment by Lordstown Motors and the GM joint venture as ways for the valley to change the score in its favor. He wants to see YSU play a central role in helping change the score with a training center to prepare YSU students for the electric automotive field.
"I really thought all along in this discussion that GM wasn’t that excited, that they felt they needed to close Lordstown," Tressel said. And now the company "is trying to contribute to our (valley) going forward in a new and exciting way."
By 2023, GM plans to introduce 20 all-electric nameplates. The company plans to invest $300 million at its Lake Orion assembly plant north of Detroit, where the all-electric Chevrolet Bolt is built, to produce new Chevrolet EVs. It will also invest $3 billion at the Detroit-Hamtramck plant — originally set last year to be idled along with Lordstown — for electric truck and van assembly.
GM buys its battery cells for the Bolt and hybrid Chevrolet Volt from Holland-based LG Chem Michigan Inc., which could not be reached after repeated attempts for comment. GM's Brownstown Township plant assembles lithium-ion battery packs. The facility planned for Ohio would build battery cells and would employ 1,000, the automaker confirmed.
"Manufacturing is and will always be at our core of what we do here," Youngstown/Warren Regional Chamber President James Dignan said. "It’s just going to look and feel different than what it did before."
The loss of GM Lordstown still stings. The roughly 1,400 employed there when the last Chevrolet Cruze rolled off the line in March have mostly all been transferred to other GM facilities, leaving behind friends, family and home.
GM Lordstown's closure already has jolted the local economy, officials say. Wages associated with the plant totaled $221 million, and it generated $40.4 million in payroll taxes in 2018. The loss of a top employer is not something the valley hasn't seen before, but the valley's reaction this time feels different.
"The valley has always been reactive .... This is an opportunity to get in on the front-end," Stockburger said. "For once, we are trying to control our own destiny. We have an opportunity to be at the table and be in charge. You never want to waste a good tragedy."
Brite is working with Hyperion Motors, a California-based electric vehicle startup focused on developing electric cars powered by hydrogen fuel cells. Hyperion, led by CEO Angelo Kafantaris, a Warren, Ohio native, plans to build an engineering facility in the northeast Ohio region.
"We want to be able to give back," Kafantaris said, "but more importantly there is a whole lot of talent in the Midwest."
An op-ed in The Vindicator by Dignan encouraging the valley to embrace being at the forefront of the EV revolution caught the eye of David Myhal, an officer at Toyo System USA Inc. in Columbus. Myhal, another valley native, thought perhaps Toyo could be a part of the EV revolution in the Mahoning Valley.
The Japanese company specializes in battery testing, and most major electric vehicle makers in Japan — including Toyota Motor Corp. and Honda Motor Co. — use its battery testing machines, according to the company's website. Toyo is still in the information gathering mode, but is interested in potentially partnering with the electric auto investments made in the valley.
"I think it’s a great opportunity," Myhal said. "Obviously the Lordstown plant for my entire lifetime has been an integral part of the valley. I would certainly love to be a part of bringing life back to it."