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GM Hindered by Line of Credit in Lordstown, Ohio

In the news: General Motors Corporation, the world’s largest car maker and producer of quality auto parts like GM alternators is once again in the hot seat. Last Monday, a group of state lawmakers have requested administration officials to reconsider a directive on General Motors since it may affect the Lordstown plant’s chances of attracting a new car.

It should be noted that the automaker has lost more than billion in 2005 which affected nine of its plants in Ohio including the Lordstown. Lawmakers are imploring Gov. Ted Strickland to review the .6 million line of credit that the Bureau of Workers’ Compensation requested in late 2005 to ensure that GM would be able to pay all of its future claims.

The said movement is headed by State Senator Capri Cafaro who said that she is optimistic in following the session but also stated that the group will have to follow the normal process of having BWC review the line of credit. Although they may be able to speed up the whole process but the final say will still be with the bureau.

The next step according to Cafaro is arranging a meeting where the group can address its case directly to Strickland.

According to administration spokesman Keith Dailey, “Strickland has not made any decision yet but rest assured that he would do what is best to keep jobs in Ohio and expand the economy. Strickland has an open-door policy and is always willing to meet with legislative leaders particularly when it involves jobs.”

Jim Graham, President of United Autoworkers Local 1117 said that he is optimistic but further stated that the meeting has taken quite a while. He also said that he has been pushing for action for several weeks now. He has been meeting up with lawmakers and even spoken with Lt. Gov. Lee Fisher who heads the Ohio Department of Development but until now he is still waiting for response from Fisher.

Graham said that so far there was never any justification for the line of credit. And hopefully now that General Motors’ financial situation is finally improving, Graham said that the state should remove the requirement. Sen. Cafaro also shares the same sentiment saying that the improved financial situation of General Motors should end the arguments on the line of credit.

According to GM spokesman Dan Flores, the letter of credit is “totally unjustifiable” basically because the automaker have always been able to pay all of its claims. And the line of credit simply ties up money which could be invested to further improve the company and at the same time increase GM’s business in Ohio. He further stated that removing the line of credit could improve Lordstown’s chances of getting a new product for 2009.

The coalition lobbying the governor includes all lawmakers from areas with GM plants.

About the Author: Noah Scott is a 30 year old native of New Jersey, writer, and car fan - having grown up with both parents being auto enthusiasts. He works for an automotive consultancy firm and regularly contributes articles to car magazines.

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