GM plant prospects are possible, but uncertain
Podcast Episode
Kyle Geissler talks with Janesville Gazette business editor Jim Leute about which products might be considered for the GM assembly plant in Janesville.
JANESVILLE — How about production of the eagerly anticipated Chevy Volt in Janesville?
Or overflow assembly for the hot selling Chevy Cobalt, a fuel-efficient compact that General Motors can't seem to keep on dealers' lots?
Or possibly large vans, which are now built at a GM plant that's even farther outside the automaker's parts network than the Janesville plant.
All have come up in various conversations about possible new products for the Janesville plant, where workers learned Monday that production of full-size sport utility vehicles would end Dec. 23.
Since early summer, a local task force has been working on a plan to bring a replacement product to Janesville. In September, the group made a proposal to GM officials and is awaiting a second meeting.
The group isn't just sitting around. Its leaders say the task force meets weekly to flesh out new ideas, compare intelligence and solve any challenge that Detroit might throw its way.
At the heart of the group's proposal is a new fuel-efficient vehicle that can be built in Janesville.
Armed with a recently ratified local union contract that's considered the most competitive in the industry, the group hopes that a $25 billion federal auto package will allow GM access to cash to retool old plants such as Janesville's for production of fuel-efficient vehicles.
Much beyond that, the local task force has been mum on the details of its proposal to GM officials.
What's left is speculation—some educated, some not—on prospects for the Janesville plant.
Chevy Volt
If GM can work out battery issues, it hopes to build the Volt by late 2010. Whether the Janesville plant could land the contract is uncertain, as other communities are seemingly well ahead in their bids to attract the work.
The highly anticipated but often delayed Volt will be capable of driving 40 miles on a fully charged battery before it switches to a gas generator.
GM has not said where it will build the extended-range electric car, but industry speculation has centered on the automaker's Detroit/Hamtramck plant, which now employs nearly 2,000 people and builds the Cadillac DTS and Buick Lucerne.
To produce the Volt, the Detroit plant would need a $336-million retooling.
Two weeks ago, the Detroit City Council approved a $136-million tax abatement for GM's proposed investment in the plant, according to the Detroit Free Press.
In addition, the automaker plans to build a $349 million plant in Flint that will make engines for the Volt and the Chevrolet Cruze, another vehicle due in 2010.
The Michigan Economic Growth Authority has approved tax credits, while three Michigan cities have OK'd tax abatements to ensure GM manufactures the Volt and its key components in Michigan.
But just because the major Volt components seem to be spoken for doesn't necessarily leave Janesville out of the picture, one local source said.
"They haven't said anything about where they're going to make the batteries," the source said.
Chevy Cobalt
Don't let a 16 percent drop in September's Cobalt sales fool you. Even with three shifts building the vehicle at GM's plant in Lordstown, Ohio, consumer demand continues to outstrip supply, GM officials said.
For the year, Cobalt sales are up 6 percent, while GM's overall sales are down 18 percent.
GM added a third shift at Lordstown in August, and the plant will work overtime Saturdays through the end of the year.
If three shifts can't meet the demand at Lordstown—GM's sole U.S. compact-car factory—it might need an overflow plant, and there's been some speculation that a retooled Janesville factory could fit the bill.
State Rep. Mike Sheridan, a former GM worker and former president of United Auto Workers Local 95 in Janesville, said the local plant could be an overflow assembly plant for GM's next hot vehicle.
"Remember how it was with the big SUVs?" he said. "GM needed three plants to meet the demand. Now they only need one, but if GM can identify where all those former Suburban and Tahoe buyers have gone, Janesville could build overflow."
The high-mileage Chevy Cruze, which is due out in 2010, also is slated for the Lordstown plant, which could have its hands full at the time with the popular Cobalt and its variations.
Chevrolet Express
The Express and its sibling, the GMC Savana, are full-size vans configured for either commercial or passenger use.
The vehicles are built at GM's plant in Wentzville, Mo., which underwent a $150 million retooling in 2003.
Speculation in Janesville has been that management-union relations in Wentzville have been less than stellar, and the Missouri plant is even more removed from the automaker's supplier networks than the Janesville plant.
But sources in Janesville have said there is little chance the UAW will allow one local union to whipsaw another and steal an existing product.
The Wentzville vans come as commercial cargo vehicles typically used by customers that require heavy-duty hauling or trailering requirements or as eight-, 12- or 15-person passenger vans.
Other possibilities
GM reportedly is thinking about bringing some of its high-mileage European models to the U.S. market, which could offer potential for the Janesville plant.
Sources have told the Gazette that some of GM's European cars could be modified for production and sale in the United States.
"Development costs would be less, and the modifications for the U.S. market would be modest," one source said.
Another said that production of European models in the United States makes sense, given the value of the dollar overseas and shipping costs.
"Anything we can get for Janesville has merit," he said. "What we're really looking at is new product and being an overflow plant."
Federal loans could help plant's prospects
Recent congressional approval of $25 billion in loans to the U.S. auto industry couldn't have come at a better time as a local delegation works to secure a new product for the beleaguered Janesville plant.
Just two weeks ago, Congress OK'd a loan package to help the industry refurbish decades-old plants and develop advanced batteries and gas-electric hybrids. The goal is a broader lineup of gas-electric hybrid vehicles, new plug-in electric cars and an expansion of fuel-efficient engines.
General Motors, Ford and Chrysler lobbied hard for the funding.
Industry observers said the package could help GM retool the Janesville plant, which GM said Monday would end production of full-size sport utility vehicles Dec. 23.
In September, a local delegation made a pitch to GM officials to bring a fuel-efficient vehicle to the local plant's production lines.
"It is our hope that the federal package offered by the government and the package that was presented by the GM task force will somehow benefit Janesville and the members of Local 95," said UAW Local 95 President Andy Richardson.
"We have a strong history of building world class vehicles, and we still hold hope for the future."
Sen. Herb Kohl, D-Wis., said the federal package supports that hope.
"We have worked to provide GM with significant federal resources to encourage re-tooling and reopening the Janesville plant so workers' jobs remain safe," he said Monday.
Oct 21, 2008 at 4:39 p.m.
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Read "Bad Money" by Kevin Phelps. Finance has gotton out of control just like during the Great depression.
The stock market is just legalized gambling. Put your money in there, and spin that wheel. Meanwhile, the rich gamble away their money, and go to rich Daddy George Bush, and ask for more quarters. He will always give them more quarters. (read the book)
The financial markets have replaced the manufacturing sector in this economy, as it produces more fake money in ways of more gambling (derivatives, futures, swaps, etc).
To those who have been mean on the gazette blog toward the GM worker: The very rich would be pleased to see the other brainwashed workers blame the GM worker for this demise. How they must laugh at how easily controlled they are, like puppets. They must love it, how you play into their evil hands.
Oct 19, 2008 at 9:33 p.m.
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Instead of tax cuts for anyone person the government need to drop every dollar available into small business. Pickup the tab for workers comp insurance for a new company for the first 5 years, build/provide utilize empty buildings for new small companies, cut the red tap to open up, pick up the tab for unemployment insurance for the first 2 years, long term goal program. I would say the government needs to open the faucet wide open to anyone that wants to give it try. Heck like in Rockford as a example down in the industrial area there City subdivided of old building to give people a place to just get a start. Janesville does the same thing but thinks they need to build new building, and give lease them to only places that relocate. I say if Joe Plumber want to start a business get him the area somewhere to workout of. With all the places leaving the country there is a supply of open buildings.
Oct 16, 2008 at 9:19 a.m.
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Apparently, people still think its ok for the top 5% of the nation to control roughly 40% of the wealth. These people are manipulating the market right now! Even the oil barons are sucking every last dime they can out of us that they can. 2.99 a gallon of gas is not cheap!!! These top 5 percent are profit taking from the middle class in a rape seen around the world. These people are suppose to be our best and brightest looking out for us. It is high time we hold hearings and trials on ethics and if you have undermined the publics trust, you should be stripped of your wealth and jailed like the criminals they are. Anyone connected to this debacle belongs in prison!!! And yet, we are on the sidelines like the lemmings in that stupid commercial. We are following these a-holes to our demise. This is all laid on our congress and Mr. President. George Bush needs to take his skirt off and nail these pricks to the wall. When I start seeing handcuffs coming out I will believe things are turning around!!!
Oct 16, 2008 at 5:47 a.m.
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Out of the 1200 soon to be out of work at GM roughly HALF don't even live in Janesville. Some come from Clinton and even as far away as the Milwaukee area. So much for hard times in Janesville.
Oct 15, 2008 at 8:32 a.m.
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polert. Curly is right, there may be a few upper management making over $250,000 but not the regular assembly workers.All I say is we can not keep on the path we are on now with the bozo's in Washington and Change is what we need. It can't get any worse than this!!
Oct 14, 2008 at 11:53 p.m.
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polert- GIVE IT A REST!! "Well Bill those Janesville asset will go to waste under a tax plan"
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Not many GM employees make over $250,000
Having Obama as president won't hurt us!!
Oct 14, 2008 at 7:48 p.m.
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Well Bill those Janesville asset will go to waste under a tax plan which was highlight in a meet/greet in Ohio with Obama where a plumber/owner operator asked Obama why Obama wanted to raise his Taxes. Obama replied to spread the wealth. Which means taken from the hard working, and give to the unwilling to work. That type of reform will crush Janesville's hopes to a new employer or another Ken Hendricks.
Oct 14, 2008 at 6:26 p.m.
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It looks like others are finally catching on. "The workforce in Janesville is considered to be one of the best in the auto industry. Perhaps GM’s executives will get smart and decide to retool the factory to build fuel-efficient vehicles". This quote was taken from the article 'A Tale of Two Plants' in the latest edition of Assembly Magazine.
A company's greatest asset is always its people. That rings no truer than the workers at Janesville Assembly. That includes all of its workers, union, management, engineers, trades, etc. GM needs to recognize this and not walk away from their greatest asset.
Oct 14, 2008 at 2:02 p.m.
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I'm crossing my fingers, of course, for any new product whether it's the Volt or something else. The Volt, of course, would be the home run, because it would assure a long-term future for Janesville. Regardless of the outcome, I want the committee to know that people in Janesville really appreciate all the hard work they're putting into a real uphill battle.
Oct 14, 2008 at 1:37 p.m.
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rockstars - also take in consideration, the G-van shares a lot of platform parts with the W-Series LCF currently made in Janesville by 35-50 people on the NPR line. If GM could ship back the 560-line from Flint, it could have all of CV under one roof (orginal plan).
The only thing stopping this effecient business plan, is the UAW. Flint and Wentzville are radical locals who won't go for it.
Oct 14, 2008 at 12:58 p.m.
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The Volt is still vaporware. The battery technology hasn't even been perfected yet. It is expected to cost $40K. Toyota already has the high milage Prius at $20K, and won't be sitting on the sidelines while the Volt "hopefully" comes out in late 2010.
Oct 14, 2008 at 12:16 p.m.
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This article is sort of misleading. It states, "If three shifts can't meet the demand at Lordstown—GM's sole U.S. compact-car factory..." That's true but doesn't mean GM doesn't bring in compact cars from other locations. The Pontiac Vibe comes from California in a joint venture with Toyota. The new Camaro (yes, it is considered compact) will be coming from Oshawa, Ontario. The Chevy Aveo comes from Korea. I'm sure there is more but that's all I can think of at the moment.
On the other hand, I have some management friends at the plant and I've been hearing that moving the vans from Missouri was the best bet and was VERY likely to happen. And, consider this really, it would have been great for the Janesville plant. Only one location that builds a product all but guarantees job security as long as the market is there. And there's still a market for vans (commercial mostly but still some personal for those large families!). The commercial market is huge for cargo vans. You see them everywhere and companies get new fleets often. As a matter of fact, I KNOW the Janesville Gazette employs the use of a few relatively new GM vans!
Oct 14, 2008 at 11:40 a.m.
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I agree Detroito. I think Paul Ryan should invite his buddy Rick Wagoner to Janesville for a summit. Wagoner still needs to make good on his promise to visit Janesville from way back in early 2005 when Janesville earned his "Go Fast" honors.
Oct 14, 2008 at 11:22 a.m.
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Detroito - good post.
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Levin has clout in DC, but, where the heck is our WI clout? Look at the committees that Feingold, Kohl, and Ryan serve on...Ryan has good relations with Feingold and Feingold is tight with both Obama and McCain.
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It should count for something. Nothing is more important right now, at least for Ryan, than putting some points on the board for Janesville, Rock County, and SC/SE WI.
Oct 14, 2008 at 11:18 a.m.
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Detroito...I don't know anything about Senator Levin ?? But what I do know is the high $$ paid for junk steel !!!
Oct 14, 2008 at 10:29 a.m.
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General Motors is now leaning towards a future Janesville product. The final decision will be made in March 2009. Detriot/Hamtramck Local 22 has hit a brick wall with their conract. Their recent vote was a large No vote which gave G.M. brass an open invitation to consider other plans for the Volt. Marketing managers also like the thought of the Volt being made in Wisconsin,however marketing managers are far removed from making any decisons. One major problem, Senator Carl Levin. He will not let Wisconsin take jobs from Michigan. His power may shut the door on Janesville forever.
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