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GM Declined Offer to Keep Lordstown Plant Open

Cleveland car dealer wanted Cruzes for ride-hailing business.

by on Mar.19, 2019

GM Chairman and CEO Mary Barra reportedly turned down a deal that would have kept the Lordstown plant open.

General Motors Co. could have avoided the latest round of flogging via Twitter from President Donald Trump about its Lordstown, Ohio plant if it had accepted an offer from one of its dealers.

Cleveland-based dealer Bernie Moreno reportedly met with GM officials last fall with an offer to buy as many as 180,000 Chevy Cruzes annually as part of a nationwide ride-hailing fleet to rival Uber and Lyft. The deal could have run as long as five years, according to a Detroit Free Press story.

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Moreno owns a dozen car dealerships across the country selling brands ranging from Lotus and Rolls Royce to Mercedes-Benz to Buick and GMC. However, GM officials studied the deal and then declined the offer apparently viewing it as not viable. The plant was idled last month as the last U.S.-built Cruze rolled off the line.

The proposed deal, which was first reported by the Youngstown Vindicator and confirmed by the Detroit Free Press, isn’t the only offer the company had for the facility. At one point, it was rumored that Tesla, which is building its Model 3 sedans in a tent, was interested in the facility.

(Trump smacks GM with new Lordstown tweet. Click Here for the story.)

The Lordstown, Ohio plant that builds the Chevrolet Cruze produced the last U.S.-built model recently.

Tesla CEO Elon Musk confirmed that the company might be interested in buying a recently closed or soon-to-be-closing plant, but never said Lordstown was under consideration. For its part, General Motors said would listen to offers for the plant, but in a statement it implied that no economically feasible offers have been presented.

“We would consider any that are truly viable business opportunities,” GM spokesman Dan Flores told the Detroit Free Press. “To be clear, under the terms of the UAW-GM National Agreement, the ultimate future of the unallocated plants will be resolved between GM and the UAW.”

(Click Here for more about GM expecting bigger profits, more transformation in 2019.) 

The Lordstown closure is part of a restructuring plan announced in late November by GM that it planned idle five factories in North America this year and cut about 14,000 jobs to save $2.5 billion this year.

GM has transferred more than 1,000 employees from those plants to other GM locations, Flores said, noting “we have opportunities available for virtually all impacted employees.” Still, it’s difficult for Lordstown workers who live near the plant to accept a move to Texas or some other state when there was a plan presented to keep the plant busy for some time.

(Lordstown plant manufacturers last Chevy Cruze. Click Here for the story.)

“If that deal was true, it could have kept 3,000 people working in Lordstown, plus all the parts suppliers on the side,” said Dave Green, president of UAW Local 1112 in Lordstown, told the Free Press.

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