Ohio still waiting on Trump’s manufacturing revival

Ohio still waiting on Trump's manufacturing revival


“Don't move. Don't sell your house,” President Trump told a cheering crowd in Youngstown, Ohio, in July 2017. The speech was made just 15 miles down the road from a Lordstown General Motors plant that the company was planning to close. Trump repeatedly used the bully pulpit of the White House to try to pressure GM into reversing the decision.

The efforts of Trump and others to stop the closure generated a lot of headlines, but in the end, they could not save the factory. GM shuttered the factory in March 2019, leaving 1,600 people without jobs. The factory had employed 4,500 as recently as 2017. “I am not happy that it is closed when everything else in our Country is BOOMING,” Trump tweeted at the time.

The Lordstown saga is Ohio in a microcosm since the last election. Despite Trump's promise to revive manufacturing and bring jobs back to the United States, that revival hasn't hit the Buckeye State, which is third in the nation in manufacturing. The state's economy is still lagging behind that of the rest of the country. Trump may yet win the state again, but his economic policies have not made it a slam dunk.

Trump won Ohio 51%-43% in 2016, winning almost every county outside of the major urban ones. It was one of the critical wins in Rust Belt states that got him to the White House. More recent polls show Trump to be vulnerable in Ohio in 2020, though the number of polls is scant. An October Emerson poll, the most recent statewide one, had the president losing to prospective Democratic opponents Joe Biden and Bernie Sanders by 6 points and to Elizabeth Warren by 4 points.

“We have had weak jobs gains, and, to the degree we have had them, they haven't been in the manufacturing and goods-producing sectors,” said Robert Schiller, an economist with the nonprofit organization Policy Matters Ohio. “You certainly can't argue that we have seen any kind of manufacturing renaissance.”

After the Lordstown factory closed, GM announced plans to build a battery factory near the closed auto plant, and it claims the new facility will eventually support 1,100 jobs. GM also sold the old plant and its equipment to Lordstown Motors, a startup that will build electric pickups, and then extended the new company a $40 million loan. Lordstown Motors, which claims it will hire 400 for the factory, is currently seeking an additional $200 million loan from the Energy Department. Even if both projects pan out, it will only restore a third of what the original Lordstown factory employed.

That follows three years during which the administration fought to reshape trade, arguing that such a reform would address the underlying long-term problems faced by U.S. manufacturing. Trump has long argued that previous trade deals boosted foreign manufacturing at the expense of U.S. workers. “Unfair trade is perhaps the single biggest reason that I decided to run for president,” he claimed in his State of the Union address. Trump boasted the U.S.-Mexico-Canada Agreement, which increases the requirements for cars to be made in North America, would create 100,000 jobs in the auto sector alone. He has repeatedly argued that tariffs on Chinese products would be paid by Beijing while also forcing it to reform its predatory policies. Tariffs on steel and aluminum are reviving domestic metal producers, Trump and his advisers maintain.

Ohio unemployment stood at 4.2% at the end of 2019, according to the Labor Department. That's down a point from when Trump took office but worse than the current national rate of 3.5%. The state added 140,000 jobs since the last election but only 19,000 in manufacturing. Last year's 27,000 new jobs were the state's lowest level of growth since the recession of 2009.

The more recent data is grimmer. The state has lost 3,000 manufacturing jobs since July, a further 3,000 in the trade, transportation, and utility sectors, and another 1,000 in construction.

The conservative Buckeye Institute said the president's trade policies were a factor. “Ohio, along with many of its neighbors, has experienced slow to stagnant growth throughout 2019,” said Andrew Kidd, an economist with the Buckeye Institute's Economic Research Center, “and the trade war, while subsiding slightly with the recent ‘phase one' deal [with Beijing], has hurt Midwest job growth.”

A Federal Reserve Board of Governors working paper in December found that the higher costs created by the White House's various tariffs and Beijing's retaliatory levies against the U.S. resulted in a 1.4% decline in manufacturing employment and a 4.1% increase in the price of finished goods.

“Tariffs are paid by the importer — that's us; that's not China,” Walter Spiegel, the chief compliance officer at Cincinnati-based Standard Textile, which employs 3,500, told the Cincinnati Enquirer in January. “It's taking cash out of the pocket of a company and paying the government. That's less money to create jobs, expand, buy new equipment, or to hire new employees.”

Small businesses are facing difficulties, too, but for a different reason. They can't find people to fill job openings in skilled trade jobs. That's created a drag on growth and investment. The administration has made a point of promoting killed apprenticeship programs, but the effort has been slow to provide results.

“I had a small-business owner in Toledo tell me, ‘I just need somebody who'll show up two days in a row on time and sober,'” said Roger Geiger, vice president of the Ohio chapter of the National Federation of Independent Business. “Think about how low that bar is.”


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