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Potential line at Janesville GM plant surrounded by 'what ifs'

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JAMES P. LEUTE
June 3, 2009
— The number of workers needed to build small cars in Janesville could be close to the number of workers laid off from the local General Motors assembly plant.

More difficult is estimating the number of workers needed if Janesville is chosen to be a standby plant—a facility held in reserve in case GM needs more production capacity.


The Janesville plant's designation as one of three that will either build small cars or become a standby plant is peppered with "what ifs."


What if the new GM doesn't make it out of Chapter 11?


What if U.S. consumers don't buy the small car GM wants to start building in this country?


What if the anticipated economic recovery takes longer than expected, and what if, when it does arrive, sales of GM vehicles don't warrant added capacity?


Last summer, Gov. Jim Doyle formed a local coalition to convince GM to retain some sort of production in Janesville. That group will meet again Thursday to discuss this week's developments.


Small car production

GM confirmed Monday that it will build a small car at an idled U.S. assembly plant. It also announced the closing of 14 assembly, stamping, powertrain and warehouse operations.


Two of the assembly plants—Orion, Mich. and Spring Hill, Tenn.—are slated to close in September and November, respectively, but will move into standby status.


The Janesville plant was added to that list, and GM said one of the three plants will be selected to built about 160,000 small cars a year.


Sources have told The Janesville Gazette that the small car operation will require about 1,200 workers on two shifts. About 1,200 local GM workers remain on layoff after the Janesville plant stopped building sport utility vehicles in December and medium-duty trucks in April.


A few hundred more likely would work in the plant as employees of supply companies under provisions in the recent contract between GM and the United Auto Workers.


Should the demand for GM production workers outstrip the supply, the automaker would make the positions available to workers elsewhere in the GM system.


Workers from Janesville who recently transferred to other GM facilities would be able to apply for a transfer back to Janesville. Their return would be based on their place in the seniority line with interested workers from other plants.


If GM ever got to the point of hiring production workers off the street, those workers would be paid about $14 per hour, about half of the current wage paid to established production workers.


That scenario is unlikely in the short term because the plant closings announced Monday will displace up to 20,000 GM workers.


Standby plants

Local officials said Tuesday they have more questions than answers about what it would mean to be a standby plant.


"Is it eternal or is there a sunset attached to it?" wondered one.


That echoes the concerns of others who said the property might sit idle, waiting to provide production capacity that's never needed. In the waiting mode, they said, the property can't be marketed to another user.


A bigger concern might be what happens to the local workforce, which now is drawing state unemployment and union-negotiated supplemental benefits that will expire in the next couple of years.


"There certainly are a number of unanswered questions, and we understand how that affects a community like Janesville," GM spokesman Dan Flores said. "But GM is like all other manufacturers that take a product to market.


"Our footprint is driven by the marketplace, and we certainly hope the marketplace picks back up."


The economic rebound will happen, another source close to the Janesville situation said.


"With any kind of reasonable growth, GM will be under capacity, and there will only be two plants to fill that void," he said.


"You could probably make the case that if (Janesville doesn't) get the small car, we might be better off. We don't know that the American public is going to buy this small car, and in five years we could be right back where we are now.


"With a flexible plant capable of building different vehicles, maybe we would be better. It's a tremendous opportunity either way."



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