Layoffs just keep grinding at Ohio

As GM rubs out 2,400 jobs, thousands more in state await the ax
Wednesday, June 4, 2008 3:25 AM
By Dan Gearino
THE COLUMBUS DISPATCH

Rough waters
During the first quarter of 2008, more Ohioans lost their jobs because of layoffs than during any other starting three-month period this decade. The news hasn't gotten better in the second quarter. A look at some of the bigger layoffs announced in Ohio since April 1:
General Motors -- The company will close its Moraine SUV plant at the end of the 2009 or 2010 model year, eliminating 2,500 jobs.
DHL -- The company's plan to hire United Parcel Service as its U.S. air-cargo carrier is expected to result in the elimination of 6,000 jobs in Wilmington, where ABX Air currently provides that service for DHL.
Payday lenders -- Plans for more than 300 job cuts have been announced since the state moved to reform the payday-lending industry. Operators in that industry have said all of the state's 6,000 payday-lending jobs are at risk.
Skybus Airlines -- The Columbus startup folded abruptly in early April, eliminating 365 jobs in central Ohio.
On the plus side, some new jobs, or plans to create them, have been announced:
General Motors -- The company will add a third shift at its Lordstown plant in September and use the plant to build new-generation, high-mileage cars to replace the Cobalt and Pontiac G5 beginning in 2010.
• Stimulus package -- The state passed a $1.6 billion stimulus bill with hopes that the investment in the Ohio economy eventually will create 57,000 jobs.
NetJets -- In March, the company said it will stay and expand at Port Columbus after being courting by other cities, a move that retained 2,000 jobs and is expected to add 800 over the next three years.
Source: Dispatch research
A bad year for Ohio workers just got worse.
General Motors said yesterday that it will close its sport-utility-vehicle plant south of Dayton in Moraine, one of four plants the company is shutting down in North America.
The move, which will cost Ohio roughly 2,400 jobs, is an exclamation point in a year of grim job news.
Ohio lost 19,423 jobs to mass layoffs in the first three months of this year, the greatest first-quarter loss this decade.
More recently, the bad news has continued to come in waves, from the sudden demise of Skybus in early April to last week's word that ABX Air could lose thousands of jobs in Wilmington because it no longer would provide services to package shipper DHL.
The worst might be yet to come. In all but one of the last eight years, the most layoffs happened in the fourth quarter.
"We're certainly experiencing several shocks or risks in the economy," said Keith Ewald, chief of the Ohio Bureau of Labor Market Information.
He said the slowdown in the housing market and the high price of gasoline make it unlikely that employers will add jobs in the near future.
Ohio is suffering because of its high concentration of jobs in struggling industries, such as durable-goods manufacturing. States with a greater concentration are facing an even deeper downturn, said James Coons, co-owner and principal of J.W. Coons Advisors in Columbus.
"The good news is, we're not Michigan," he said.
Gov. Ted Strickland said GM informed him about its decision to close the Moraine plant late Monday. He called the news "disheartening" but understandable, given the high price of fuel. GM is closing some truck and SUV plants to focus more on car production.
The governor, a Democrat, blamed President Bush for not doing more to address the effect that high gasoline prices have had on the economy.
Jason Mauk, executive director of the Ohio Republican Party, called Strickland's comments "disingenuous" and said blaming Bush won't help solve the problem.
But the news from GM was not all bad. The company said it will add a third shift at its Lordstown plant this year and will begin making a new high-mileage car at the northeastern Ohio plant near Warren beginning in 2010.
"Lordstown was saved because they've been a small-car specialist, and Moraine was closed because it's been a large-truck specialist," said James Rubenstein, a Miami University professor who writes about the auto industry.
The closing in Moraine, which is slated to take effect after the 2009 or 2010 model year, continues a steady drop in GM's Ohio work force.
A state estimate published in March ranked GM as Ohio's 14th-largest employer with 14,650 jobs. Honda was the next carmaker on the list, ranked 17th with 14,000 jobs.
Yesterday's announcement almost certainly means Honda will overtake GM, an event foreshadowed by long-term trends at both companies.
"The significance today is the two lines passed each other," Rubenstein said.
In addition to Moraine, GM said it will close plants in Janesville, Wis.; Ottawa, Ontario; and Toluca, Mexico.
Kelly Schlissberg, spokeswoman for the Ohio Department of Development, said the wide-ranging territory covered by the announcement underscores how local workers are part of a global market.
"We in Ohio are constantly working on growing and retaining jobs for Ohioans. We have to also understand that businesses have that global aspect and will make the decision best for them," she said.
Regardless of the reasons, it is a painful blow for workers. Jim Clark, president of the International Union of Electronic Workers-Communication Workers of America, said his union isn't ready to accept the company's decision.
"GM could reward the community's long-time support by working to rebuild the plant's future, not abandoning an already hard-struck area," he said in a statement. "I hope that GM is not out of fresh ideas and new products. They owe Moraine workers and the community."
Dispatch reporter Mark Niquette contributed to this story.
dgearino@dispatch.com