GM employment levels fall short of those needed for state grants

By JIM LEUTE ( Contact )   Tuesday, May 6, 2008
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Podcast Episode


Kyle Geissler talks with Janesville Gazette business editor Jim Leute about GM falling short on employment levels tied to state grants.

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— While the clock still is ticking for General Motors, the automaker’s Janesville plant employs far fewer workers than it promised three years ago when accepting state training grants totaling $10.1 million.

And with last week’s announcement that GM will cut one shift of production in Janesville and eliminate at least 750 hourly jobs, there’s little likelihood that the local plant will have 3,300 on its payroll anytime soon, if ever again.

GM announced in 2004 that it would spend $175 million to retool its Janesville plant for production of the next generation of full-size sport utility vehicles.

State officials applauded GM and chipped in with grants that required GM to maintain 3,300 hourly jobs. At the time, the plant employed about 3,685 hourly workers.

In 2006, more than 900 employees left the plant in a special attrition program, and other production adjustments have reduced the current payroll to about 2,300 hourly workers.

If July’s job cuts hold to the 756 total GM reported to the state, hourly employment would drop to about 1,550.

That’s less than half of what GM said it would employ when the grant contracts expire Dec. 31 of this year and Dec. 31, 2010.

“The announcement we made last week will put us significantly under (3,300),” said John Pearse, controller at the Janesville plant.

Wisconsin Department of Commerce spokesman Tony Hozeny said state officials are following the GM situation closely. He said GM isn’t in default on the grants.

“There are typically contractual penalties associated with these grants, but we haven’t come to that point,” Hozeny said. “We haven’t had a chance to meet with GM, yet.”

Hozeny said the state is more interested in helping GM than collecting penalties.

The goal always is to work with companies to retain as much of the operation and as many jobs as possible, he said.

“GM has been a partner of ours since 1919,” he said. “There has been a market downturn, they’re experiencing some difficulty and there will be some substantial layoffs.

“It’s unfortunate, but we want to continue to work with them in a positive manner.”

Pearse said GM contacted the state last week with news of the mass layoff, and they’ll discuss repayment options at a future meeting.

“We knocked on their door,” Pearse said. “We want to know how they want us to proceed, and whatever they decide, we will abide by it.

“We’re on a friendly, good level with the state, and our goals are the same, and that’s to secure as many jobs as we possibly can.”

Pearse said GM has used about $9.25 million of the $10.1 million allocated by the state.




reader COMMENTS (29)
deltafox5674
May 7, 2008 at 12:36 p.m.
Suggest removal

I think that they will lay off all they can, then try to rehire them at a substantially lower wage after the retool. Lets face it, there are plenty of people willing to work for $10.00 per hour for 40 hours doing what the current employees do for about $30.00 per hour. What will happen will be equivalent to back door union busting.

JCK
May 7, 2008 at 11:55 a.m.
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petcat, would you like to clarify that "embezzelment" comment? Do you have anything at all to support that or are you just saying it because you can?

Jackson
May 7, 2008 at 11:33 a.m.
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Read the article, and look at past Janeville history, the tax payer has built avalon road for GM, the new of street to GM, shoveled ten on millions of grants to GM, and now more.

The Tax payer is footing some of the bill to have GM here. This funding which is about 80 % of what Janesville has to offer for perks to employers. These perks are suppose to be for new employers that the City loans a building to AKA a tif district.

Zoom
May 7, 2008 at 10:02 a.m.
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whocares,
The Chevy Volt is a long time off.
http://www.thetruthaboutcars.com/volt-bi...

Zoom
May 7, 2008 at 10 a.m.
Suggest removal

Businesses fund unemployment, not taxes, and GM pays the supplemental wages negotiated by the Union, which brings their pay up to 85% when laid off. That is one reason why GM wants to hire non-core workers at half the pay, without the extra unemployment supplement.

petcat
May 7, 2008 at 8:47 a.m.
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This is what is called corporate welfare. Our tax is being used to prop up mismanagement and maybe even embezzlement.

tallman
May 7, 2008 at 8:44 a.m.
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The State should represent all citizens the same but they do not!! Close that plant and end the controvercy year after year. Everytime we turn around it's about how much can we taxpayers shovel into this one pain in the butt employer. I am personally tired of handing out welfare to the overpaid and benefits emplyees of GM. They are one of the areas biggest welfare recipients plain and simple. It's all about what can we, all the rest of the taxpayers do for these poor poor upper five and six figure workers. Close it and move on finally please GM!!

Jackson
May 6, 2008 at 11:41 p.m.
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This is a rob peter to pay paul deal. If you have to ask this is the reason people look down on GM workers.

I do not believe anyone on here has done the research to figure that the assembly of the cars of the future. Lets face it, and leave it up to the Asians, and Germans.

Zoom
May 6, 2008 at 9:39 p.m.
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...uuuhhh, I think it's pretty clear that GM cares how much it costs. My taxes should prop up a mismanaged company?...no thank you. Isn't that socialism?

jvldude
May 6, 2008 at 9:34 p.m.
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I don't care what it costs. It is a good idea for GM and the state to work together to keep this plant open. Granted I am sick of hearing about GM but people need jobs. GM pours money into Janesville's economy as do the rest of us who have good paying jobs. Bottom line is, it would be a good idea for our government to keep this plant open and retool it at all costs. For the people who are bitching about how much money they make GO TO SCHOOL PICK A TRADE GET OFF YOUR ASS AND MAKE SOMETHING HAPPEN IN YOUR LIFE, BUT STOP COMPLAINING

Zoom
May 6, 2008 at 9:19 p.m.
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...and employers can actually get a credit back if they go a certain amount of time without having to pay out unemployment benefits.

unkbd
May 6, 2008 at 9 p.m.
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Thank you Zoom for enlightening Jonwayne89, jackson, and anyone else who doesn't understand that their taxes don't pay unemployment benefits. The employer does, and as far as the sub pay goes, that is paid by GM also as a negotiated benefit. As far as re-tooling for another product goes, I don't think that 10 Million would cover it. The plant is in need of a completely new paint shop in order to spray some of the paints now being put on the vehicles, not to mention the body shop tooling requirements of a smaller car. If the new Camaro takes off like it should I wouldn't be surprised if GM contemplates a second plant to build that. With the 6 cylinder option and possible turbo 4 cylinder on top of the v8 the customer base could be huge. All speculation of course. If the economy doesn't turn around there may be no point in building anything.

ramstud
May 6, 2008 at 8:32 p.m.
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Detroit Hamtramck will be building the Chevy Volt.

Zoom
May 6, 2008 at 8:30 p.m.
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GM pays for the 85% wages, not the State...hence their desire to hire non-core workers at half the wage without that unemployment benefit.

jonwayne89
May 6, 2008 at 7:26 p.m.
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I think it is REDICULIOUS how the state caters to GM . be self sufficent or close the doors . I am not making the money the line workers are and I have to pay the state back for ALL the assistance they get . 2 Years extended unemployment and 90% of there wages ? I get laid off and I get what $400 a week and if I get a part time job I only get a fraction of that ... Sorrry but GM makes me SICK !!!!!!!!!!

whocares
May 6, 2008 at 5:28 p.m.
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The Chevy Volt is on a fast track to production. Who's going to build it in the US?

RUSerious
May 6, 2008 at 4:58 p.m.
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I don't think drunk, homeless people want to be mentioned in the same sentence with Jackson. And giving him food for thought would be a waste of good food-it's too little too late. By what he's spewing, sounds like he's been ingesting fertilizer.

Opinionsforfree
May 6, 2008 at 4:31 p.m.
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Besides that I feel (even not being a gm supporter) that it would be a great idea to retool the Janesville plant for a hybrid or a more fuel efficient car. We have the Plant, the infrastructure, the work force etc etc. How would this be a hard feat to pull off? Say it cost 10million, and lets say again the state offered to pay for full cost of retooling the plant. I would support it. At least I would know where my tax dollars were going. Just some food for thought (Jackson needs all the food for thought he can get)

Opinionsforfree
May 6, 2008 at 4:25 p.m.
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I've seen drunk homeless people on the street ranting at a higher level than jackson.

sam
May 6, 2008 at 2:58 p.m.
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why should they bring the cars here so you can put some other people out of work

support_local_racing
May 6, 2008 at 2:45 p.m.
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bennetonf1, I think this was plan B. Plan A was hope like heck that they didn't need Plan B.

This is just my opinion, but judging by the styling of the GM cars, they didn't seem to have much a vision for the future. I say that in past-tense, because I do like where Pontiac is going and the new Impala is an improvement. Hopefully it's not too late.

WHATMEWORRY
May 6, 2008 at 1 p.m.
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HEY ZOOM !! What are caps?
Note the word SIMILAR.Eat your lunch and get back on the line

Zoom
May 6, 2008 at 12:50 p.m.
Suggest removal

Posting in all caps is not necessary.

Retooling would only be a possibility if GM needs the production capacity, which they don't. The Ion is no longer made, and the Cobalt is a crappy car compared to the competition.

bennetonf1
May 6, 2008 at 12:48 p.m.
Suggest removal

If I understand the process correctly , it takes about three years from concept to production to implement a change in manufacturing. Also, to go from full size SUV's to cars would require a substancial investment from GM.
One would think that they would have speculated this situation would come soon and have a plan "B" ready.

BiGCaT
May 6, 2008 at 12:48 p.m.
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Jackson you sound like a broken record and your real boring. Go post on the Detroit Free Press I am sure someone over there will exchange written stupidity with you.

Zoom
May 6, 2008 at 12:40 p.m.
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The state is in a no-win situation. If they push hard for repayment by GM, the state will be blamed for future layoffs or a complete shut down. If they don't go after repayment now, we are out $10.1 million because GM will never pay it back. Oh well. They tried.

Jackson
May 6, 2008 at 12:12 p.m.
Suggest removal

Here is the question for GM workers when filling out a app. do you put down zero information about employment, or do you but down that you worked at GM.

1 Correct answer put down nothing. If you put down you worked at GM they know trouble will be in the brue when you start working.
When GM workers start job searches that will be the real test of how the area views GM workers AKA lazy

Jackson
May 6, 2008 at 12:03 p.m.
Suggest removal

Watch the movie Rodger, and me by mike moore it is the same tape replayed but with Janesville.
You can not say the GM worker did not do this to themselves. Time to cut the cord with tax paying money, and let those boy figure out how to make burgers.

WHATMEWORRY
May 6, 2008 at 11:58 a.m.
Suggest removal

FORGET THE NEXT GENERATION SUV'S. RE-TOOL THE PLANT FOR COBALTS AND SATURN ION'S. I UNDERSTAND THESE TWO HAVE MOSTLY IDENTICAL PARTS.THESE VEHICLES OR SOMETHING SIMILAR ARE THE FUTURE.SAVE THE PLANT.

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