Janesville32.3°

2008: A look back at a tough year

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JAMES P. LEUTE
December 22, 2008
— As it turns out, a General Motors executive’s comments in February should have been interpreted from the half-empty—not the half-full—perspective.

“Right now, we need those plants, and that’s what we’re going to continue scheduling,” Troy Clarke told a Gazette reporter about the future of the GM assembly plant in Janesville.


“ … We have no announcements to make on capacity at this time. What we really want them to do is make a whole lot more of these great products.”


But sometime in the next 82 days after Clarke commented at the Chicago Auto Show, GM changed its mind about Janesville.


Fueled by skyrocketing gas prices and plummeting sales of SUVs, GM made a series of announcements that will likely drain the economic lifeblood from Janesville’s automotive industry.


-- On April 28, GM announced it would eliminate the second shift of SUV production at the plant in July.


The production cuts would eliminate 852 jobs at GM and more than 450 others at Janesville supplier companies such as Lear Corp., LSI and Flint Special Services.


-- Five weeks later—June 3—a decades-old rumor became harsh reality when GM said it would end SUV production at the storied Janesville assembly plant by the end of 2010 at the latest. Janesville was put on notice a few weeks later when GM CEO Rick Wagoner said the automaker would speed up the closures.


-- Eighteen minutes after reporting for work on Monday, Oct. 13, local GM workers learned that the Janesville plant would stop building full-size sport utility vehicles Dec. 23.


According to the state, the end of production would mean the loss of jobs for another 1,345 hourly and salaried GM employees and a minimum of 675 workers at supplier companies.


Altogether, the cuts and ultimate end of production will eliminate nearly 2,200 GM jobs and at least 1,150 at supplier companies in Janesville.


In retrospect—and without regard to the wishful thinking that Clarke expressed in February—the handwriting was on the wall for the local plant for some time.


The Janesville plant opened the year with plans to slow the speed of its assembly line from 55 jobs per vehicle to 44. The 15-percent production cut was GM’s response to current and forecasted market demand for full-size SUVs. Production at Janesville’s sister plant in Arlington, Texas, would not be slowed, primarily because that plant was building hybrid models of the SUVs that were expected to sell better.


With the re-rate came a drop in employment as fewer units coming off the line meant fewer workers.


A few days after the Chicago Auto Show, GM offered a new round of buyouts and early retirement offers to all 74,000 of its hourly workers in the United States. By the time the attrition program ended in late May, nearly 600 Janesville workers agreed to leave the plant under the program. That combined with the layoffs associated with the loss of the second shift to reduce the plant’s hourly payroll to about 1,150—1,300 below the levels of a few weeks earlier.


A March strike by the United Auto Workers against GM supplier American Axle put the Janesville plant in sporadic periods of downtime through July. When the plant shifted to one-shift production later that month, workers were building 440 full-size SUVs a day.


Sagging sales, however, set up more weeks of non-production.


In response to GM’s cessation announcement in June, Gov. Jim Doyle appointed Tim Cullen, a retired businessman and Janesville School Board member, and Brad Dutcher, then-president of United Auto Workers Local 95 in Janesville, to a task force charged with trying to maintain a GM presence in Janesville.


That group developed a plan to help GM stay in Janesville and eventually presented it to executives in Detroit. The group is still awaiting word from the executives, who have spent recent weeks in Washington lobbying for a bailout of the domestic auto industry.


A critical component of the group’s plan is a local contract agreement that Local 95 members overwhelmingly ratified in August. The agreement eliminated decades-old work rules, allows outside companies to handle more sequencing and sub-assembly work and is considered locally to be a competitive operating agreement that sets the standards for all other GM plants.



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