GM employment levels fall short of those needed for state grants
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.