Local government – Ohio, Michigan and Maryland: General Motors’ plant closures underscore the importance of economic diversity

Source: Francis A Mamo, Rachel Cortez, Gregory W. Lipitz, Alexandra S. Parker, Moody’s, Sector Comment, November 28, 2018
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On 26 November, General Motors Company (Baa3 stable) announced it will halt production at four US manufacturing plants as soon as March 2019. The closures are credit negative for several local governments in Ohio (Aa1 stable), Michigan (Aa1 stable) and Maryland (Aaa stable).

Collectively, the four plants employ more than 3,800 people and had a 2017 payroll of $480 million (see exhibit 1). All of the closures are credit negative for the affected local governments, but closure of the Lordstown plant in Warren, Ohio (Baa1 negative) will have a pronounced negative effect on Trumbull County’s (Aa3) employment base….