Still standing by: Little happening to restart GM plant

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Jim Leute
Sunday, January 27, 2013

— The speculation about Janesville's most famous vacant building crops up as routinely as the seasonal weeds in its sprawling parking lot.

Virtually any activity at the General Motors plant triggers community interest in what's happening—or about to happen—at the hulking 4.1 million-square-foot facility that's now been shuttered for about four years.

The reality, however, is that not much of anything is going on at the plant, which GM continues to hold in standby status with no impending plans for the 250-acre property that includes the neighboring auto transport yard to the south.

“Future market conditions and our UAW-GM National Agreement will dictate what happens to the plant going forward,” GM spokesman Bill Grotz said in an email. “The term 'standby' is synonymous with idle.”

In the meantime, local economic development officials idle on the sidelines, periodically reaching out to the automaker and fielding inquiries from any interested developers.

“The unfortunate reality is that while this is a really big thing for Janesville, the decision is being controlled at the national level by GM and its union,” said Vic Grassman, Janesville's economic development director.

GM laid off more than 1,300 workers on the plant's light-duty Suburban line in December 2008, five months after 1,300 people had already lost their jobs on the second shift.

With a relative handful of employees left behind, GM produced its last medium-duty truck in April 2009 and turned out the lights on a production run that spanned 10 decades in Janesville.

Local speculation resurfaced as recently as last month when the number of vehicles in one parking lot outnumbered the normal contingent attributable to the handful of security and maintenance people still inside the plant.

That activity, Grotz said, involved the removal of production equipment to support other GM operations.

When asked specifically about the status of the Janesville plant, its condition and what's left inside, Grotz declined a request for an interview but said in an email:

“There's really no story to tell here. The plant is on standby and will remain so for the foreseeable future. We maintain security at the plant and conduct regular maintenance. The activity observed at the plant in late November/early December was just routine removal of surplus equipment, which is part of our normal course of business.”

Any decision on the plant's future rests with GM, which isn't likely to make one without input from the United Auto Workers—at least until the current labor contract expires in September 2015.

Sporadic talks

As they've done for the last four years, local economic development officials still reach out to GM officials about the status of and possibilities for the plant.

“We continue to have a dialogue with the people in Detroit, and if and when we get inquiries from prospective users or developers, we pass that information along,” said James Otterstein, Rock County's economic development manager. “The challenge is that the building is technically not available.

“It's sort of like me being interested in your house, which isn't for sale.”

Otterstein said the inquiries are periodic, and they tend to come from people interested in the scrap value of the assets or those with development interests in the transportation, defense and alternative energy industries.

Grassman as recently as October talked with a couple of people interested in a development that included a multimodal hub. Given the property's rail service, it could be a distribution point where trucks are put on trains for distribution, he said.

Any re-use of the Janesville property likely would follow one of two scenarios.

The first would involve a return of some sort of GM production.

Some industry observers rule that out, arguing that if more capacity is needed, GM will continue to push its other plants to full three-shift production.

Others, however, point to a resurging industry that might need to tap empty auto plants, even if it would mean an investment of hundreds of millions of dollars in Janesville.

The second involves a GM decision that it no longer needs the Janesville plant. In that case, industry observers said GM would either sell the property to a third party for maximum asset value or demolish the facility for maximum scrap value.

What's buried where?

If the building is ever demolished or sold, the new owners would face a spate of environmental issues, which at this point are widely rumored but not validated.

Environmental concerns associated with the local plant are legendary, fueled primarily by generational talk of buried vehicles and waste such as paint and toxic solvents.

In recent years, representatives from the Environmental Protection Agency and the Wisconsin Department of Natural Resources have worked with city officials in an effort to assess the situation at the plant. They have been denied access to the property, however, making an assessment nearly impossible.

In the past, DNR officials have said they would like access to GM data to see what type of materials could pose environmental problems. Based on that, the department would start drilling for samples and follow up with remediation plans, if necessary.

“Because it was made part of the so-called good GM, it's my understanding that it has gone through various stages of environmental reporting,” Otterstein said. “We've been led to believe that over the last 25 to 30 years—pick a period—as situations were identified, they were addressed.

“To what extent, however, we just don't know.”

Linda Hanefeld, a program manager in the DNR's division of air, waste and remediation and redevelopment, said officials met with GM representatives in December about how the automaker can start to assess possible contaminants.

While not much else has happened on the environmental front in the last two years, the December meeting opened the door to future discussions, she said.

Ticking clock

Environmental uncertainty couples with the property's size to create a significant challenge to its re-use, Otterstein and Grassman said.

Both said the demand for 4.1 million square feet of space is virtually nonexistent.

“There is some good space there, but not 4.1 million square feet of it,” Grassman said. “Nobody needs all of that, so the possibility is that some of it could be demolished, particularly in areas where there might be environmental concerns, and it could be broken up for a variety of uses.”

As local speculation continues, the plant's biological clock continues to tick.

The building has undoubtedly deteriorated, Grassman said.

Because so few local officials have been in the plant, it's difficult to know to what extent the building has degraded and whether that would be a deal-killer for a prospective developer.

“There is certainly an ongoing concern about the long-term health and utilization of that property,” Otterstein said. “Unfortunately, there are a variety of factors that influence what needs to be done.”

Added Grassman: “The reality is that we lost GM and the local suppliers, and you have to assume that at this point it's an inefficient operation.

“It would be great if we could just move on.”

Last updated: 8:11 am Monday, April 29, 2013

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