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What can Janesville offer GM?

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FRANK J. SCHULTZ
June 11, 2009
— General Motors has developed 12 criteria to decide where to build its new, small cars.

It's unknown whether Janesville can come out on top when each of those 12 items is weighed and measured, but GM will make the final decision by the end of June.


Even if Janesville gets the nod, production would not begin until spring 2011.


That's according to Wisconsin lawmakers who met Wednesday with GM officials in Washington, D.C.


GM is considering three plants for the small car production: Janesville; Orion, Mich.; and Spring Hill, Tenn.


Troy Clarke, head of GM's North American Division, and Tim Lee, vice president of manufacturing, met with members of Congress from Michigan, Tennessee and Wisconsin in separate meetings.


Senators Russ Feingold and Herb Kohl and Representatives Tammy Baldwin and Paul Ryan represented Wisconsin.


Clarke and Lee said they would choose one of the three plants by the end of June. Production would not begin until spring of 2011, Ryan said.


Ryan called Clarke and Lee the two key decision makers on site selection for the new small car.


"They don't have a sense for who's going to be selected, yet," Ryan said.


"They are seriously considering Janesville," Feingold said. "There can be no doubt the other two locations are fighting hard as well."


"They walked us through their criteria for making the selection," Ryan said.


But they did not say how each plant ranked on each of the criteria because they don't yet have all the data.


One criterion is the incentives each state is offering. Meetings are set for next week to get each state's final offer, Ryan said.


Ryan could not name all 12 criteria. He did say Janesville is best of the three when it comes to one of them: "We have the most skilled workforce," he said.


Janesville doesn't have the best location, and it lacks a stamping plant, Ryan noted. The Orion plant has a stamping plant several miles away, and Spring Hill has its own stamping plant.


A new paint shop would be required at Janesville, Ryan said, but the other two have new paint shops that would make them winners in that category.


Another advantage of Janesville's is cost of labor. Because Janesville has been idled for longer than the other two, it would have more workers hired at lower pay rates, so the cost of labor would be the lowest of the three, Ryan said.


The two plants not chosen to produce the small car will be designated as on "idle" status and would be the first to be activated if demand for other GM products rises and more production capacity is needed.


There are no plans to invest in the "idle" plants, Ryan said.


Ryan called the meaning of the "idle" designation "murky."


"It's a very indefinite status, in my opinion," Ryan said. "... It's unclear what that means and what kind of a timeline for an idled plant will be. It's completely dependent on market demand."


Much has been made about GM's rating of different workforces based on their labor contracts. Janesville has a 100 percent compliance rating, based on passage of the local labor agreement, but the GM officials said the other two plants would have the same rating, Ryan said.


Ryan said it was not clear how those plants would reach the 100 percent rating or what the status of their labor agreements is.


The delegation made the case for Janesville, talking about the workers and the city's commitment to GM, Ryan said.


"We wouldn't be in this position as one of three possible plants to have new production if it wasn't for the workers at the plant themselves and the UAW," Ryan said. "... That's the story here. It's not the politicians. It's the workers and the union that put us in this position to be competitive in the first place."


Feingold was equally complimentary and said the GM officials were very complimentary about the role UAW Local 95 has played.


Some have said Michigan will win out because of political factors, but Feingold argued against that view:


"I don't think it's going to come down just to politics," Feingold said. "I think the people representing the company are sincerely interested in some of the advantages Janesville brings to the table."


Feingold said Wisconsin might have a stronger political case to make: With the fates of both the Janesville plant and the Kenosha Chrysler plant now it doubt, Wisconsin could lose its entire auto industry, "which would not be pretty politics, either for the administration or for Wisconsin."



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