GM’s Shutdown of Ohio Plant Will Idle Thousands
Just days before America pays tribute to its working men and women, this blue-collar city will mark a different sort of labor day. Its No. 1 employer will pull out, and thousands of auto workers will lose their jobs.
The closing of the General Motors Corp. plant will end a 64-year bond between a town and a company that grew side by side. Most folks cannot remember Norwood without GM. Some have never worked for anyone else.
But that will change in this Cincinnati suburb after the last car rolls off the assembly line on Wednesday. It will close a chapter of Norwood history. Now, it’s just a waiting game.
“It’s like facing an execution,” said auto worker Cleon Montgomery. “You look at something, you know it’s coming. It’s just real, real quiet.”
The plant is one of 11 that GM said last fall it would pare back or close in the next three years to reduce overcapacity and cut operating losses. The 11 plants in Ohio, Michigan, Missouri and Illinois are older and most had been scheduled for shutdown for years.
More than 29,000 workers are affected; about 4,000 are at Norwood.
This month, Norwood filed a $318-million suit against GM and four of its executives. The suit alleges GM breached its contract with Norwood and seeks damages for loss of revenue, commerce and general decline it claims will result because of the closing. GM has refused to comment.
“What the city of Norwood has done is nurture a relationship with GM . . . accommodate them and indulge them at every point assistance was requested, just like you would indulge a child,” said Robert Kelly, the city’s law director. “We have an overindulged child down here. We’ve raised a brat.”
The town and the workers are braced for hard times. Displaced workers looking for jobs, some for the first time since high school, face younger, better educated competition.
Financial Turmoil Seen
“This is all we know,” said Paul Fithen, an 18-year GM plant veteran. “What is there to get in? I’m 40 years old. People say, ‘Get into computers.’ Are they going to look at a 40-year-old or a whiz kid getting out of college?”
Norwood faces financial turmoil. Though only about 10% of plant workers live in the city, Norwood receives more than $2.6 million annually in earnings taxes from GM. That represents about 28% of the city’s budget.
Norwood faces a potential $1.8-million deficit by year’s end.
“It’s terribly devastating,” said Mayor Joe Sanker. “We are caught in a real bind now.”
Norwood has laid off 26 city employees, slashed by 10% the salaries of about 15 department heads, not replaced 22 fire department, police department or municipal workers who quit or retired early, contracted for private garbage collection and halted use of city funds for improvements such as sidewalk repairs.
Property Tax Proposed
The City Council recently voted to propose a property tax increase on the November ballot, which would raise $1.7 million the first year and lesser amounts in the four succeeding years. In May, a proposal to raise $2.1 million was rejected, but city officials say they didn’t have enough time to educate voters.
While City Hall already struggles, the worst is ahead for others, such as auto suppliers and places like Anna’s Family Restaurant. Owner Anna Fillis said her restaurant, across the street from the plant, depends on GM for about 60% of its business.
“It can do nothing but hurt when you’re pulling 4,000 people out of a community,” said City Treasurer Mary Lee Beckstedt.
When GM first announced the closing, it said the plant would shut by 1988. It later moved up the date, and city officials complained it gave them even less time to prepare.
GM’s Efforts to Help
GM says it’s taken steps to help Norwood, including agreeing to withhold an earnings tax from unemployment benefits that will bring in $700,000 a year. Officials say those benefits last up to two years.
But it rejected a city request for transitional funding of almost $12 million over five years. GM also turned down a similar, but smaller, request from the school district.
Norwood also wants GM to raze the site so it will be more appealing to developers. GM, which said it would spend $9 million preparing the plant for reuse, earlier this month released a 200-page report from an outside consultant that found more than 100 new uses for the facility.
The report concluded the plant could be reused for light manufacturing, storage and warehousing.
Norwood contends GM is doing nothing more than meeting legal obligations.
Playing on a Slogan
After a June meeting, Norwood released a statement, playing on a Chevrolet advertising slogan, that said GM “does not listen to ‘the heartbeat of America,’ but turns a deaf ear on all but the pulsations of its corporate wallet, and . . . has shown a heedless indifference to any and all pain and suffering of this community.”
Even with this acrimony, no one predicts Norwood will turn into a ghost town like some Rust Belt towns did when the steel mills started going cold in the late 1970s, a time when the auto industry was prospering.
For one thing, Norwood has other industry, though GM is four times bigger than any other employer. There’s also growth in the area. Since 1984, about 25,000 jobs have been created annually in an eight-county, three-state area, according to the Greater Cincinnati Chamber of Commerce.
And auto workers are luckier than the steelworkers. The United Auto Workers-GM Human Resource Center offers dislocated workers jobs training, retraining, counseling and placement.
GM to Transfer Some
GM officials say it’s too early to tell how many Norwood employees will be transferred. But union officials aren’t optimistic, noting other closings, including a fabricating plant employing about 2,500 in Hamilton, about 20 miles away. It’s scheduled to shut by 1989.
Norwood, a town of 26,000 surrounded by Cincinnati, is in the heart of auto country. It is just a mile from I-75, sometimes known as ‘Auto Corridor’ because of the scores of auto-related businesses located near the interstate.
The city’s populace is a blend of German and Appalachian. Years ago, folks say, Norwood was called “Little Kentucky.” Family ties are strong; fathers and sons have worked side by side at the plant.
So it was no surprise that auto workers put up a fight when GM said it was going to close the Chevrolet-Pontiac-Canada Division plant.
A Cost-Saving Plan
Local 674 of the UAW proposed a cost-saving plan that suggested Norwood could build 1988 Chevrolet Camaros and Pontiac Firebirds $200 million cheaper than GM’s sister plant at Van Nuys, Calif., which is to remain open.
GM no longer needs two plants to fill the demand for the cars. From 1984 to 1986, Camaro sales dropped almost 20%, Firebird sales 7%, company officials said.
“If I was a stockholder, I’d want to know . . . (if) we can save $200 million, why are they cutting us out?” said Fithen.
The Van Nuys plant assembles 54 cars an hour; Norwood’s hourly rate is 41.
Other union proposals varied from a 10% assembly line speedup to switching from white to natural color paper towels, saving $5,040 a year.
Stood By Decision
GM stood by its decision, which was based on several factors, said Betsy Hayhow, a spokeswoman, who refused comment on the accuracy of the cost-cutting proposals.
She said the Norwood plant, one of GM’s oldest, is surrounded by buildings and cannot expand. The Van Nuys plant, she added, is the only totally GM operation on the West Coast and the company felt it important to have a presence there.
Another factor, Hayhow said, is Van Nuys’ use of the Japanese-style team concept. The approach, adopted in 1986, simplifies the work process and gives employees more responsibility.
Transition efforts, such as counseling and seminars on resume writing, are now well under way. GM plans to distribute workers’ resumes to other auto makers.
But some are wary.
‘Willing to Work’
“My father taught me if you’re willing to work, you’ll get by,” Fithen said. “Now, we’re willing to work and we can’t.”
“I had what I wanted,” Montgomery, the auto worker, said. “It’s hard to be angry when they furnish you a living. But you give them something too. You give them 20 years of your life. . . . I am not 100% convinced I’ll have a job three years from now.”
Norwood is more confident of its future.
“Norwood isn’t going to die,” Mayor Sanker said. “In fact, I think we’ll probably end up being a better city. All our eggs won’t be in one basket.”
Treasurer Beckstedt added: “When things get tough, Norwood pulls together like a family. It’s going to be a blow, like a blow in any family. We’ll come out of it. . . . Norwood’s going to be a thriving community again.”
