Area already feeling effects of GM announcement
Podcast Episode
Kyle Geissler talks with Janesville Gazette reporter Stacy Vogel about how the closing of GM might affect the local economy.
Photo
Traffic is heavy as workers leave the Janesville GM plant at the end of their day on Monday. Official word came Monday that the plant will close on Dec. 23.
JANESVILLE — The news couldn't come at a worse time.
The national economy is in crisis. The housing market has collapsed.
Then came Monday's announcement—long expected but still unsettling for many—that General Motors will cease production of sport utility vehicles at its Janesville plant Dec. 23. The stoppage could eliminate 1,200 jobs at the plant and 500 or more jobs at local suppliers if GM decides not to retool the facility.
And if you're wondering when Janesville is going to feel the effects of the announcement, look around—it probably already is, experts said.
"You can already observe that people do feel the effects of (a plant closure), even when it's projected a year off," said Laura Dresser, labor economist at UW-Madison's Center on Wisconsin Strategy. "That already changes behavior."
Some of the effect could be psychological, experts said.
Janesville's future is uncertain, so plant families and even families unconnected to the plant already are changing their spending habits. Combine that with the state of the national economy, and it could mean bad news for the city's retail industry.
"I suspect this spring should be pretty rough for the retailers in the area," said Gary Green, professor with the UW Extension's Center for Community and Economic Development. "Maybe even for Christmas spending, people might pull back."
Residents probably will cut back most on big-ticket items such as appliances, he said.
It appears people already are cutting out the biggest-ticket item of all: new homes. Janesville issued just 88 construction permits for new, single-family homes between Jan. 1 and Sept. 30, 2008, said Vicky Miller, development specialist with the city. That's a 52 percent drop from the 185 permits the city issued during the same period in 2007.
A lot of the drop relates to the housing market collapse, but Miller believes some of it has to do with uncertainty surrounding the plant, she said.
The Rock County Job Center has been dealing with laid-off autoworkers since June, when GM ended its second shift in Janesville, eliminating hundreds of jobs at the plant and local suppliers.
The former plant workers have some time to decide what they will do—they'll earn up to 90 percent pay for nearly three years through unemployment insurance and union benefits. That's true of the workers who will be laid off in December, too.
But employees of suppliers such as Lear and LSI aren't so lucky, said Bob Borremans, executive director of the Southwest Wisconsin Workforce Development Board.
The board and other groups at the job center help laid-off workers with everything from skills training to resume assistance, Borremans said.
As the laid-off workers re-enter the job market, competition for jobs will become much tougher, Borremans said.
"What you've got is a lot of good, qualified people out there competing for a limited number of jobs," he said.
Plus, former GM workers probably won't find jobs that pay as much as they're used to, so they might take on second jobs or have stay-at-home spouses enter the workforce, putting further pressure on the market, Green said.
If the community doesn't offer new jobs for these people, they might have to move or commute to Madison, Rockford, Ill., or even Milwaukee.
"Relatively speaking, unemployment is relatively low, certainly in the Madison area. The question is whether their skills are going to match those jobs," Green said.
And even though the potential loss of GM might discourage some businesses from locating in Janesville, other businesses might see the plant's closure as an opportunity, experts said.
The job center has identified health care, transportation, distribution and utilities as industries with potential for growth in the Janesville area, Borremans said. The center is working with local technical colleges to help workers acquire the skills needed for those jobs.
Several experts mentioned green technology such as wind and solar energy as an industry ripe with potential in Rock County.
"Things like that would be very exciting opportunities for Janesville," Dresser said.
Oct 15, 2008 at 4:05 p.m.
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reply to optimism...no I do not work in rock county. my 30 years of nursing credentials speak for themselves.
Oct 15, 2008 at 12:03 p.m.
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More #'s showing just how much the economy is in decline, and will be deepening into recession.
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http://www.bloomberg.com/apps/news?pid=2...
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Notice the segment that details the auto makers. The restructuring plan that GM recently announced to stay solvent (ie: avoid bankruptcy) was entirely based on sales figures to NOT decline any further then they have all ready. This whole thing is a slow motion train wreck. They better get their government bail out now, while the printing press is still running strong.
Oct 15, 2008 at 11:25 a.m.
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piterboy........I PRAY to god I NEVER have you as a nurse. Yuck. You have no empathy what so ever, and that is what nursing is suppose to be. I bet you work in Rock County "somewhere".
Oct 15, 2008 at 11:24 a.m.
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DELTA...I have been saying that for over a year now. Do people really think that burglaries are up just because? I suggest everyone lock their doors and pay EXTRA SPECIAL attention to your surroundings.
Oct 15, 2008 at 11:19 a.m.
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piterboy,
What you said about not caring is exactly why our society is in dire straits these days. Those words you uttered, "I don't care" is the mainstream attitude people have in our culture. Do you think you'd have that good job you've been blessed with had the founding fathers who layed out the foundation for this great country wrote the constitution with that same attitude? ("I don't care") Newsflash, they didn't! They made it bigger than them! They put their heart before their hand! The people in our communities that choose to be self serving and simply turn the other cheek because they're doing pretty good are going to get bit whether they believe it or not. I'm not saying this because I hope it happens to anyone, it's just the truth. The greed and lack of empathy for others is killing our generations. It's all about, "what about me" when the mentality should be "what can I do to help you". If we don't come together and unite as a country, we won't have a country! Do you not care about that?!!
Oct 15, 2008 at 11:14 a.m.
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http://www.channel3000.com/money/1771762... A ton of bars are hurting now
Oct 15, 2008 at 8:54 a.m.
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Just wait until crime goes up with the unemployment figures...that will be fun.
Oct 15, 2008 at 8:40 a.m.
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I think the point most people are trying to make is that this will affect the whole community. Those people who were competing for the 9-14 dollar jobs (more common) are now going to have thousands more people competing for the same jobs. Unfortunately, someone won't get that job now. The schools are already clogged up. How many heating and air conditioning jobs does a contracting local economy need? It lowers the whole standard of living in the community right down to the lowest income levels and poor. Local charities are already suffering from the first round of layoffs. Food banks are emptying out. United Way donations are down and so on. I've never once in all my time on these blogs heard a GM worker complain about his or her situation. On the other hand, there are truckloads of people more than willing the bash them for wanting to make a good living and provide for their families. This is not to say Janesville won't bounce back eventually, but considering the overall economy and Janesville's over reliance on retail and manufacturing, it's going to take quite some time, maybe even many years. It's great to say we're going to turn into a green community and work to bring those jobs here. However, we're not the only city in America looking to do the same thing. It is going to take due diligence and careful planning the ensure Janesville secures the jobs of the future. We certainly can't promote our community spirit or compassion if these blogs are any indication.
Oct 15, 2008 at 7:13 a.m.
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hey optimism NO I DO NOT CARE.....I COLLECT FROM THERE PENSION AND HAVE A FULL TIME NURSING JOB. NO I DO NOT CARE ABOUT THEM. I MAKE AS MUCH WORKING AS A NURSE AS I DID IN THE PLANT. NO I DO NOT OWN A GM CAR EITHER...MY CHOICE!
Oct 14, 2008 at 11:13 p.m.
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I don't see to many GM workers gripin about "who's gonna feed me". I've read ALOT of these articles and I have yet to find, pity me posts from GM workers.
Oct 14, 2008 at 7:52 p.m.
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PITERBOY....trust me YOU WILL care.
Oct 14, 2008 at 7:39 p.m.
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I feel for those GMer's even more now that I seen over the weekend in Ohio at a meet/greet a plumber/owner operator ask Obama why obama wanted to raise the plumbers taxes. Obama replied to spread the wealth. Which me the hard working people will support the unwilling to work. I bet many GMer's would like to start a small business but under Obama they will have to work twice as hard. Once to support themselves, and once for those not willing to work.
Oct 14, 2008 at 7:33 p.m.
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What scares me is, I was planning on working at McDonalds when my hubby gets laid off....and by then people won't even be able to afford to eat at McDonalds, so those dime a dozen jobs are going to be going buh bye. So, I am just wondering if street walking will be legal by then? That might be my only hope.
Oct 14, 2008 at 7:28 p.m.
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This whole article seems a repeat of what most of us on these blogs have been saying for months. It took a financial "expert" to come up with these predictions? Not to be rude, but duh!
Oct 14, 2008 at 7:18 p.m.
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wow i really feel the love in here......
Don't like to see anyone lose their jobs. Good Luck to all affected!!
STAY SAFE!!
Oct 14, 2008 at 6:57 p.m.
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who really cares if they close. they offered transfer papers for years another words "the writing HAS BEEN on the wall for years. they don't offer transfers for the he$$ of it. if you chose not to go to bad for you...been there, tried to tell you to get the heck out of janesville and go where there is work. most of you whined about leaving family so whos going to feed ya now? I think your worries and aggravation are soooooooooo deserved. gm offered huge packages to transfer FOR YEARS. hopefully alot of you end up in flint michigan or hamtramack and you will wish you would not have waited to get out. boy have you got trouble adjusting if you go there now. they don't cater to janesville transfers.
Oct 14, 2008 at 5:48 p.m.
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I lost my job not directly because of this plant closing but because the economy is so bad. I lost it on July 30. I still have not found a job. I've been applying everywhere I can imagine. But there is always someone more qualified than you, or you are too over qualified to punch numbers at a gas station. It sucks GM is closing but do people really think that other people could afford to buy yet alone drive those big SUV's? People need to stop over reacting. Janesville will bounce back. Who cares if GM is closed? Didn't this town used to be a farming community????? Oh but who would wanna work on a stinky farm with animals and do physical labor all day??? ME!!!!!!! (I am not bashing GM here)
Oct 14, 2008 at 5:38 p.m.
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Okay, Okay the GM plant is officially closing. It's time to end the bitterness towards GM workers. Yes they had it good for a long time. Don't punish them because of where they were employed. (I have never been employed by GM for those of you wondering.) Come on, Enough is enough.
Oct 14, 2008 at 3:59 p.m.
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GM workers will be fine, they will get 90% of their wages between unemployment and SUB pay. Its the rest of the unemployed that will suffer.
It's a very soft job market and has been for several years and it's only getting worse. I know I've had potential employers in interviews telling me they're having 200+ applications for one position.
While my unemployment is unrelated to GM, and I'm already cutting back and have been for several months now. Once my unemployment runs out in January I won't have any way of paying for rent and putting gas in my car unless I can land a job.
The fact that GM is closing the plant before years end shouldn't be a surprise to anyone.
Whether you work at the plant or family/friends do, I think we all knew once they said 2010 would be the closing date it would be sooner rather than later.
Oct 14, 2008 at 3:13 p.m.
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As someone mentioned before, the bike tunnel will give a nice place for the homeless to sleep in the cold winter.
Oct 14, 2008 at 1:46 p.m.
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kennedys got me chucklin again...:)
Oct 14, 2008 at 1:19 p.m.
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At least there is going to be a Children's Museum and a bike tunnel to keep our spirits up.
Oct 14, 2008 at 1:07 p.m.
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The job market is already very soft. You might see a hundred jobs open on various job sites. Out of those 100, 20 are medical related, 10 are retail, a few truck driving jobs and then the rest are make money from home scams. Eventually the unemployment will run out or people will be done school expecting to make a reasonable income, but it's not a guarantee anymore. The goal for Janesville should be to keep taxes low for home owners and businesses, but instead they are raising taxes and utility cost next year. Meanwhile they are expanding bike trails, building bike tunnels, and giving money to skate parks. That is the downside to a city council type set up, because they all want to have their names attached to something for when they run for state political positions or just to say they did something. In this economy its best to just keep the belt tightened until things level off.
Oct 14, 2008 at 12:09 p.m.
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there go's christmas, santa is not going to be giving out the big stuff this year.
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