GM plant closing tears at Ohio community

ByMarisol Bello, USA TODAY
July 21, 2009, 2:38 AM

ONTARIO, Ohio -- When General Motors, the biggest employer in town, laid off 400 workers in December, it was like a boulder falling into a very small pond.

April and Rick Allison lost their jobs stamping out doors and other car parts. They plan to leave to find work.

Their departure means their landlord, Angelo Sorrenti, is worried about his business, so he's holding off buying a new pickup.

That hurts Graham's Auto Mall, which has laid off sales manager Steve Brown.

Now Brown can't make his regular contribution to the United Way.

The United Way has reduced donations to charities such as Friendly House's after-school and summer program for low-income children.

Friendly House is increasing its summer day camp fees. Single mom Pamela Hall worries if that keeps up, her 9-year-old daughter Courtney will have to stay home.

The struggles facing the people of Ontario and its neighboring communities show how the 400 layoffs ripple far beyond the gates of the GM plant, where 860 people still work. The stories reveal how job losses at a plant tear the web that binds the workers and their neighbors.

And Ontario is just one of 12 cities facing the bleak prospect that its GM plant will shut down in the next two years.

President Obama promises a stronger, healthier future for the restructured GM and Chrysler, but the White House acknowledges that it means downsizing. For Ontario and its 5,200 residents, already under strain, downsizing means losing the remaining 860 jobs.

"Something like this can devastate a little town," says Kim Hill, assistant director of research at the Center for Automotive Research in Ann Arbor, Mich.

More layoffs will ripple across Richland County, where the recession already has led to a 13.1% jobless rate, well above the state's 11.1% and the nation's 9.5%. Situated between Cleveland and Columbus, the county's biggest community is Mansfield, an industrial city next to Ontario with a population of 50,000.

Ontario, a mix of farms and newly built suburban mini-McMansion subdivisions, has grown into a retail hub for the county with shopping strips and big-box stores. That's largelythanks to the GM plant.

Hill says that for every job cut at a stamping plant like the one here, three more could be lost as the facility no longer buys supplies or hires contractors for services, such as cleaning; retailers and restaurants see fewer customers; and local government receives less tax revenue.

Ontario officials are bracing for big drops in income and property taxes as jobs disappear and people leave. The largest chunk of the city of Ontario's revenue, about 44%, comes from a tax on wages. Revenue from the 1% tax — $3.7 million last year — goes toward police, street repair and other services, Mayor Ken Bender says.

About 40% of that tax was a product of jobs at the GM plant. This year, even before the plant shuts down, the city expects to collect at least $300,000 less.

Bender says the plant closing will have "a catastrophic effect" on the police force and other services. Already, the city has laid off eight people from a workforce of 56, including two police officers and two dispatchers.

Bender doesn't know how bad it will get, but he says less revenue and more layoffs are likely.

Politicians and area residents are petitioning GM to keep the plant open, but the company says the closing is final.

"There's not really any alternative," says GM spokesman Tom Wilkinson. "In order for the company to be viable going forward ... we need fewer plants. That's the reality."

Starting over

The Allisons moved to Ontario to work at the stamping plant five years ago when the auto parts maker where they worked in Dayton scaled back.

"When we came up here we were told it was the best plant. ... We felt safe coming up here," says Rick Allison, 30. "The fact that it was going to stay open for many, many years was another plus, but obviously, it did not turn out to be the truth."

They've been out of work since December, except for two weeks in April when the company called them back temporarily.

They are each eligible for a $45,000 buyout to leave GM, or they can take a chance that the 10 years they have in the company puts them high enough on the seniority list that they can transfer to another plant.

The uncertain future weighs heavily. With a newborn baby and three daughters under 12, do they gamble with GM to hang onto their health insurance? Or do they each take the buyout and cut their ties to the company?

"You want to make sure you are doing the best for your family, but you don't know that until things pan out eventually," says April Allison, 32. "I'm scared to death."

Either way, they know they won't be staying in Ontario.

"We're going to go back home and start over," says Rick Allison. "We had lives before GM; we'll have lives after GM."

'We have cut back'

As the Allisons prepare to start over elsewhere, their landlord, Angelo Sorrenti, is expecting more turnover in the 20 three-bedroom houses he rents out.

The $650 to $700 monthly rents he collects supplement the income on his homebuilding business, Arcangelo Builders, which has taken a bad hit since the economy tanked last fall.

Sorrenti, who built homes that sold for up to $500,000, went from putting up five houses a year and employing nine people to building none this year and laying off seven workers.

Now, he's working on smaller jobs he wouldn't have taken a year ago, such as remodeling kitchens and bathrooms.

The plant closing comes in an already tough time for Richland County home sales. Latest figures show 87 homes sold in June, down from 113 the same month last year. The average sale price fell to $78,015, down from $92,364 in June 2008.

"This is the slowest period I've ever experienced in the last 28 years," says Sorrenti, 51.

So he is scaling back. He was thinking about replacing the pickup he bought at Graham's Auto Mall eight years ago, but now that's out.

"We have cut back in all areas of our life," he says. "If everybody does that, we'll be hurting more and more in our community."

Even so, he is upbeat about the place that became his home when he left Italy 38 years ago.

"I have seen this happen in the early '80s, when many factories closed," Sorrenti says. "But believe it or not, we've been able to re-adapt going through these difficult times, which is why I tend to have a positive outlook for us."

Fear of the unknown

At Graham's in Mansfield, where the mainstay of the business for 40 years has been GM cars, sales are down 25% for the first five months of 2009 from the same time last year, says general manager Kenneth Williams.

As more customers like Sorrenti hold off car purchases, Graham's has laid off three workers out of 165 in January. One was Steve Brown, a sales manager who's been in the car business for 20 of his 49 years.

He spends his days looking for jobs online at home in Savannah, a rural spot 20 miles from Mansfield.

Brown says he never expected to be out of work so long. He's applied for 30 jobs but says local businesses, reacting to GM's problems, are not hiring.

Unemployment benefits, savings and his wife's job as a manager at a plastics manufacturer will pay their bills through the end of the year.

"What if this time next year, I'm still out of work?" he wonders. "Unemployment is gone. It's the fear of the unknown."

His plans for a comfortable retirement have crumbled. He and his wife of 28 years have lost more than a third of their 401(k) retirement savings in the recession.

"We were doing it right. ... I wasn't going to be a burden to anybody," he says. "It turned out nothing like we've been planning."

He and his wife spend only on necessities: food, house payments, utilities and insurance. His charitable giving was one of the first things to go. His donations to the United Way used to come out of his paycheck.

"We can't do it right now," he says.

'We can't be negative'

The United Way of Richland County has seen fundraising suffer for three years as GM's troubles and the recession have put more people out of work. Donations fell from $1.9 million in 2007 to $1.7 million in 2008. Executive director Skip Allman expects an even bigger drop this year.

That means the 27 charities the United Way funds will receive less money.

Friendly House received $239,000 from the United Way this year, $31,000 less than last year. The drop meant director Terry Conard had to raise the fee for the 10-week summer day camp to $30 from $10 last summer.

The program, which provides tutoring, swimming lessons, games, and arts and crafts for kids under 18, is a life-saver for Pamela Hall. She doesn't have to worry about paying a babysitter or leaving her daughter Courtney, 9, on her own while she is at work.

Hall worries that she won't be able to afford any more fee hikes for the day camp.

"There's a lot of low-income families that can't afford it, not even $5 or $10," says Hall, 39. "I don't know that I'll be able to send my daughter. I'm a single mom trying to make things work."

The Allisons used to give to the United Way during drives at the plant. Now, their charitable giving is on hold, too, as they dismantle their life in Ontario.

United Way's Allman expects the trickle-down effect from families like the Allisons leaving the area will touch every corner of the county.

Right now, everyone feels as if they are in a boat, riding out the gales and hoping the waves will let up.

"We don't know how bad it can get," Allman says. "Of course, we can't be down. We can't be negative. It's a luxury we don't have ... We've never had to come together like this."

GM plants scheduled to close

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