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Odds against Janesville GM plant

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Gazette staff
August 6, 2010
— General Motors again raised hopes in Janesville on Thursday, but a United Auto Workers source said the local plant probably would not be chosen if one of two “standby” plants reopens.

CEO Ed Whitacre said Thursday that the automaker is considering reopening an idled factory, but he gave no specifics. His comment came during an auto industry conference in Traverse City, Mich., in which he was primarily addressing the public stock offering GM plans later this year.


The only two idled factories after General Motors’ bankruptcy are Janesville and Spring Hill, Tenn., which are on “standby.”


While state and local officials pushed optimism, reality points to Spring Hill.


Several UAW Local 95 sources told the Gazette on Thursday that indications to them are that any new product would go to Spring Hill rather than Janesville.


“Odds are it would be the Spring Hill facility,” said John Dohner Jr., who was the shop chairman for UAW Local 95 before he transferred to the Fort Wayne plant in August 2009.


“They’ve already decimated the workforce in Janesville,” he said in a voicemail to WCLO Radio. “Workers have been forced to go all over the country. I don’t believe they’ve forced anybody out of Spring Hill.”


The Spring Hill plant still has about 1,000 workers manufacturing engines and doing other light tasks, the Nashville Business Journal reported last month. About 3,000 people worked at the plant before GM shut down the assembly line last November.


GM spokeswoman Kim Carpenter on Thursday confirmed that work such as stamping was still being done at Spring Hill.


No operations are under way in Janesville. GM ended light-duty production here in December 2008 and shut down a small medium-duty operation the following April.


GM has moved some equipment from the Janesville facility to other plants in operation, Carpenter said.


GM could bring the Janesville plant online if the company needed it, she said.


Other local officials countered advantages that Spring Hill might have.


“A lot of people like to point out that this is the oldest plant,” said Tim Cullen, who co-chaired a state task force to bring GM back to Janesville. “The reality is the walls are old, but the actual production facilities are not.”


The Spring Hill plant, the birthplace of Saturn in 1990, was built for cars, but Janesville’s truck plant could be restructured to produce whatever GM needs, he said.


Assembly Speaker Mike Sheridan of Janesville, former president of UAW Local 95, also emphasized Wisconsin’s quality workforce, tax credits and the Development Opportunity Zone created for Janesville.


Last summer, the Janesville and Spring Hill plants were in the running for a new small car for GM, but production went to a plant in Orion Township north of Detroit.


Public and private groups in Wisconsin offered $195 million in incentives to lure the work to Janesville. Included in that total were $15 million from the city of Janesville and $20 million from Rock County.


The state of Michigan offered a $779 million incentive package that included tax credits and federal money.


Wisconsin officials have maintained contact with GM since then, including a trip to Detroit by Sheridan as recently as two months ago.


Sheridan said the discussion was “really about Janesville and just making sure they know that we’re still here and prepared to do whatever it takes. That was my discussion with them—just a continued dialogue to make sure we still have that good relationship.”


He said GM officials made no promises or commitments, and they talked a lot about the economy and making sure all of GM’s plants are up to full capacity.


“All I can say at the time of those discussions, the only two plants on the right side of bankruptcy was Janesville and Tennessee,” he said. “That’s what they have; that’s what their options (are).”


He said there was no indication which plant—if either—GM would reopen.


Asked whether the state would put together another incentive package for GM, Sheridan said he has to talk with Gov. Jim Doyle.


“I can’t make any commitments at this point,” he said.


Cullen said Whitacre’s comments can only be good news in the long run.


“If they’re going to open a plant, (there are) only two they have to open,” he said.


Carpenter’s description of the situation was less black and white.


GM’s definition of “standby” is that the two plants would be “on the list for consideration” if GM needs to increase production capacity, Carpenter said.


“Really, the future of a standby capacity plant all depends on what the market’s doing and if we need to add capacity to meet volume requirements,” Carpenter said.


GM has been “pleasantly surprised” by how well its products have been doing in the market, Carpenter said. The automaker’s July sales from its four brands—Chevrolet, Buick, GMC and Cadillac—were 25 percent ahead of those last July.


The company continues to evaluate market factors daily, she said.


“Adding capacity in terms of a full plant is a very big commitment,” Carpenter said. “We have to make sure the market and the volume is really there and it’s not a short uptick.”


Sheridan said even if GM decides to reopen the Tennessee plant, “we are going to continue our efforts.”


“I’ve always said we’re not giving up on this plant until they take a bulldozer to it.”



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