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So what does ‘product-ready’ mean?

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JAMES P. LEUTE
June 27, 2009
— A top General Motors official said Friday that assembly plants in Janesville and Spring Hill, Tenn., are “product-ready” and will be the first called into service if demand for the automaker’s products exceeds capacity.

But Rep. Paul Ryan, R-Janesville, said his hometown shouldn’t hold its breath waiting for that to happen.


GM confirmed Friday that it will build small and subcompact cars at its idled plant in Orion, Mich. The Wisconsin and Tennessee plants also were in the running and will now be designated as “standby” plants in case GM ever needs more capacity.


Troy Clarke, GM’s president of North American operations, said the Janesville and Spring Hill plants are on equal footing for future production, but whether that happens depends on demand for GM products.


The Spring Hill plant is configured for unibody platforms, while the Janesville plant is set up for fame-on-body production. In other words, Spring Hill is ready for cars, while Janesville is tooled for trucks or SUVs.


“It depends on how fast the market grows and in what segments,” Clarke said in a conference call with reporters. “I’m not saying the Janesville plant couldn’t be converted, but that conversion would take time.”


Ryan said it’s his understanding that the redesigned GM will run at about 89 percent of capacity in an industry that’s now selling slightly fewer than 10 million cars a year. Ryan said he’s been told the automaker can add shifts at plants and run at 130 percent before it will need to bring Janesville or Spring Hill into the mix.


“What I’ve been told is that’s a market of 17 1/2 to 18 million vehicles a year,” Ryan said.


Ryan said the community and its workers can’t wait for that to happen, if it ever does.


“We need to move on, and it’s been my position that we get local control of that plant and if GM ever needs it and it’s available, we’ll lease it back to them,” Ryan said.


In conversations with GM officials Friday, Ryan and Wisconsin Assembly Speaker Mike Sheridan, D-Janesville, said GM officials told them the United Auto Workers would need to approve any sale of the plant.


“It seems unlikely to me that the smart thing to do would be to let that plant sit idle for a half dozen or more years given where GM is, what has to happen in the marketplace and what will likely happen with the competition and GM’s market share,” said John Beckord, president of Forward Janesville.


“My personal feeling is that we should get control of that site and get on with its re-use.”


The 1,200 or so laid off workers at the Janesville plant are currently contemplating a special attrition package that would either put them into some form of retirement or have them sever all ties with GM. If they don’t take the retirement or buyouts now on the table, many workers are questioning whether their unemployment benefits will expire before GM returns production to Janesville.


GM officials couldn’t say Friday how long the Janesville and Spring Hill plants would remain in “standby” status.


“I’m not sure there’s an answer to that,” said GM spokesman Chris Lee. “Whether it’s three, four, five, six years, we just don’t know.


“Three years ago the industry was selling 16 million units, and now we’re barely at 10 million. The analysts don’t think we’ll get back to that, but we’ll see.”


When asked if the Janesville plant could sit in “standby” status for an eternity, Clarke said GM would look at its situation “every now and then.”


Decisions won’t be made in a vacuum, he said, adding that GM, the UAW and state and local authorities would be involved if the “standby” designation were to be changed.



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