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Domestic Auto Maker Collapse Would Hurt Central Ohio
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A Democratic Congress that’s unwilling or unable to approve a $25 billion bailout for Detroit’s Big Three appears ready to punt the automakers’ fate to a lame-duck Republican president. Caught in the middle of a who-blinks-first standoff are legions of manufacturing firms and auto dealers — and millions of Americans’ jobs. U.S. auto companies employ nearly a quarter-million workers, and more than 730,000 other people have jobs producing the materials and parts that go into cars. In Central Ohio, auto industry woes are being watched closely by union and business leaders.
Worthington Industries began operating in 1955 when founder John McConnell discovered a niche in the automotive market’s demand for steel. Since that time the Big 3 automakers have all been customers.
“It’s good business, it has been good business, they are some of our top customers in the steel processing group but the automotive business has been good business to Worthington over the years.”
“Cathy Lyttle is a Worthington Industries spokeswoman. She says it would be hard on the company to lose a large purchaser of steel like an automaker.
“We like the car business but at the same time we know that if we lose one of them it would certainly be something that we would have to work through as a business to deal with that; to lose a customer of that caliber,” Lyttle says.
Rumors that one or more of the Big 3 are teetering on the brink of collapse has people worried. People like the president of the local United Auto Workers.
“That’s always on our minds.”
Local 969 president Dave Davis used to work at the Delphi plant in Columbus, a plant that made parts for General Motors and once employed 5,000 people. But the number of employees dwindled to a few hundred before the plant was shut down last year. Asked about the impact on Columbus if other automotive suppliers were to close, Davis says all you have to do is look at the west side of town.
“Well there’s always the trickle down effect which if you look at the west side of Columbus from where Delphi used to sit several businesses have collapsed and a lot of the small mom-and-pop stores have closed down and other large ones as well,” Davis says.
The state of Ohio is heavily devoted to manufacturing says Ryan Augsburger with the Ohio Manufacturers Association.
“Whether you look at it by employment or productivity Ohio ranks third nationwide in manufacturing,” Augsburger says. “Over 20 percent of the state’s gross state product comes from manufacturing and that’s double of any other private industry sector.”
GM, Ford and Chrysler all employ thousands of people in Ohio but Honda is the largest car maker in the state employing 14,000. It builds some 680,000 cars a year at its Marysville and nearby East Liberty plants. Dozens of small to medium sized suppliers produce parts for Honda and other car makers. That means that it’s in Honda’s interest that those parts suppliers – the ones that also supply domestic producers — remain healthy. A Honda spokesman turned down a request for an interview on the subject but Ron Lietzke released a carefully worded statement:
“The auto industry,” Lietzke says, “is comprised of separate companies that are cross integrated through their supply chains. Honda encourages initiatives that are essential to maintain the short and long term viability of the auto industry including the hundreds of suppliers in the U.S.”
That means that keeping the Big Three in business is good for Honda as well. Chris Haydocy is president of a GM car dealership on West Board Street. He looks at it this way:
“Name any supplier, the number one buyer or rubber, the number one buyer of steel, metal, aluminum, chemicals, the number one buyer of microchips is the car manufacturer,” Haydocy says.
Meanwhile Senate Majority Leader Harry Reid has called off a planned vote this week on the $25 billion auto industry bailout. Reid says he wants to figure out some way to help Detroit’s struggling Big Three but that efforts to do so have stalled.