(Bloomberg) -- General Motors Co. is proceeding with plans to part ways with the massive Ohio car factory it’s operated for more than half a century, all but cementing the facility’s status as a political liability for President Donald Trump.
The United Auto Workers couldn’t persuade GM to reconsider its decision to close Lordstown Assembly Plant, the union confirmed Thursday in a document summarizing the contract agreed to yesterday. The fate of the factory has been fodder for Trump’s critics for almost a year, and the attacks are certain to continue on the campaign trail.
Two candidates running for the Democratic presidential nomination -- former Texas Congressman Beto O’Rourke and South Bend, Indiana, Mayor Pete Buttigieg -- name-dropped Lordstown during the party’s debate Tuesday. Buttigieg called the closed Chevrolet Cruze plant “one more symbol of the broken promises that this president has made to workers.”
GM announced in late 2018 it wouldn’t allocate future product to the plant. The automaker has been in discussions to sell the facility to Lordstown Motors, an affiliate of fledgling electric-truck maker Workhorse Group Inc. While the UAW fought for GM to keep the factory in the fold, it settled for an all-new battery plant that will be built nearby and create about 1,000 jobs. Lordstown Motors plans to create 400 jobs initially, according to GM.
But workers at the Lordstown battery factory will be paid less than what vehicle assemblers make, people familiar with the arrangement said. They’ll be compensated under a separate agreement from the master contract UAW members are expected to vote on in the coming weeks, one person said.
Trump spoke with UAW President Gary Jones on Wednesday about the tentative agreement. On Thursday, the union’s local presidents and chairman -- roughly 200 officials -- are deciding whether to put the deal to a vote of the entire membership and if workers will return to their jobs before ratification.
While its leadership was deliberating, the union released a summary of the four-year contract on its website. It includes offers of $11,000 ratification bonuses for senior workers, $60,000 early retirement buyouts for up to 2,060 employees and annual raises and lump-sum payouts.
Republican Senator Rob Portman of Ohio told reporters he was concerned the Lordstown assembly plant wasn’t part of the tentative agreement.
“We have earned the right to have a vehicle there by doing the right thing for GM,” Portman said.
‘No Place to Go’
Union members from Lordstown showed up at the UAW’s meeting in Detroit to protest the fate of their factory.
“These people all have families in Lordstown,” said Dan Morgan, shop chairman of UAW Local 1112, which represents the remaining workers. “They put faith in the UAW. If they don’t put a product in there, then they have no place to go.”
This could be a big problem for the hundreds of workers in Ohio who didn’t accept GM’s offer to be transferred to the company’s other factories.
They may have to find work at the battery facility at less pay, or hope that the possible deal with Lordstown Motors works out. The latter option is a long shot -- the company is led by the founder of Workhorse, which reported just $6,000 of revenue last quarter.
GM wants to continue with the sale to Lordstown Motors. If those talks fall apart, GM could either close the factory or put it on standby. The company has put plants on hiatus before and brought them back, including facilities in Spring Hill, Tennessee, and Orion Township, Michigan.
GM stopped making the Chevrolet Cruze at Lordstown in March. Soon after, Trump and former Vice President Joe Biden both took shots at the company for not investing in the Ohio community.
During a July 2017 rally in nearby Youngstown, Trump told supporters “don’t move, don’t sell your house,” because his administration would bring jobs back to the area.
“I’ve met with these members of the UAW who are striking outside of facilities in Cincinnati, in Lordstown, Ohio, which has just been devastated, decimated by GM and their malfeasance,” O’Rourke said Tuesday. “What they want is a shot.”
(Updates with details of the agreement starting in the second paragraph.)
--With assistance from Justin Sink and Mark Niquette.
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