Auto recovery would bode well for Janesville GM facility
Photo 
Dr. David Cole
JANESVILLE — The fact that an assembly plant Spring Hill, Tenn., did so well in the recent General Motors-United Auto Workers contract negotiations could bode well for the automaker’s idled plant in Janesville, an industry consultant said Wednesday.
GM and UAW negotiators reached a tentative agreement late last week on the four-year contract.
Most noteworthy in these parts is a product commitment of two mid-size vehicles to the Spring Hill assembly plant, which GM closed in 2009 but retained along with the Janesville plant in its reorganization.
GM designated Spring Hill and Janesville as “standby” plants, meaning that although they were idled, they could be put back into service if the automaker needed more production capacity.
The contract, which UAW locals around the country will soon vote upon, makes the $419 million commitment to Spring Hill for two programs that will result in more than 1,700 new jobs.
About 600 new jobs are expected at Spring Hill next year, with 1,100 more to follow in 2013.
Industry speculators predict Spring Hill workers will build the Chevrolet Equinox and GMC Terrain midsize crossover utility vehicles, now being assembled at a Canadian plant that hasn’t been able to keep up with orders.
The contract also says that the Janesville plant will remain on “standby” status.
David Cole, chairman of the Michigan-based Center for Automotive Research, has long maintained that both plants could come back online.
His oft-made prediction that Spring Hill would precede Janesville appears correct.
Cole said Wednesday that he was not at all surprised by the extent of work committed to the Spring Hill plant, work that the UAW has said originally was slated for Mexico.
The automaker, he said, is stretching its capacity and adding shifts at its 11 operating U.S. plants.
“You can put Spring Hill on the table as a victory for the UAW, but I think GM is getting to the point that it really will need the capacity,” Cole said. “And, of course, after Spring Hill, Janesville is next in line.”
Cole said GM is making that commitment to Spring Hill now, even though projections call for the U.S. auto market to sell 11.5 million to 12 million vehicles this year.
That’s well below what many consider a recessionary level of 14 million vehicles per year.
U.S. light-vehicle sales hit 11.6 million in 2010, up from the previous year’s 10.4 million—the lowest total since 1982, according to industry researcher Autodata Corp.
Sales averaged 16.8 million annually from 2000 to 2007.
“Right now, there’s uncertainty with the overall economy,” Cole said. “People are just sitting on their wallets.
“If the market rebounds, and I think it will, GM will need more capacity if it can maintain its 20 percent share of a market at 15 or 16 million vehicles.
“That’s when I think GM will consider reopening Janesville. They’ve always liked the workforce there.”
Of course, the vast majority of that workforce is gone, either transferred to other GM operations, retired or in some other way no longer associated with the automaker.
Still, Cole said, the potential is there for a similar type of workforce.
In addition, a UAW summary of the contract indicates that GM will invest $150 million and create or retain more than 500 jobs through the assembly of a new compact vehicle at a plant yet to be determined.
UAW Local 95 President Mike Marcks was in Detroit on Tuesday to get contract details.
Throughout the year, he and other union leaders have pressed UAW leaders to keep Janesville in mind as they negotiated the contract. The goal, he said, was that if a product couldn’t be assigned to Janesville, at the minimum the plant would not be moved to “closed” status.
As of Wednesday, it was uncertain how many local UAW members would be eligible to vote in Janesville on the contract.
It also was uncertain when that vote would occur.
Cole said the recent contract is a signal that the UAW and GM have reached a level of labor-management harmony not seen in some time.
The contract includes a new profit-sharing formula that is based on the company’s North American profits. If GM earns less than $1.25 billion, workers won’t get any payment. In 2010, GM earned just under $5.7 billion in North America, which would mean a $5,500 profit-sharing check under the new formula. Under the old formula, workers got $4,300.
“Now, everything’s based on the performance of the company,” he said. “GM’s moving into levels of really significant profitability, and the union’s seeing that if it can make money at 11.5 million or 12 million vehicles a year, it could really do well at 15 million or 16 million.”
Sep 24, 2011 at 9:17 a.m.
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" at least they didnt accept a handout"
since when is a loan a handout?????
Sep 24, 2011 at 6:03 a.m.
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youkillme......Your comment is totally bizarre.......What part of my comment had anything to do with "complaining"? I realize that corporate profits are frowned upon by liberals(maybe that disconnect is how you misread my comment as complaining?)but I definitely have no issue with companies that make serious amounts of money.........
Sep 23, 2011 at 8:27 p.m.
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The reason Janesville is left on stand by is that by technically leaving the plant active, GM is not responsible for cleaning up any enviromental issues associated with closing/tearing down the building. Remember, there is 100 years of ground contamination on that site. It is cheaper to leave it vacant.
There is little chance that GM will ever come back. The sooner people realize this and can move on, the better.
On a lighter note - anyone else have the FordF150 Ad appear on the bottom of the story about GM?
Sep 23, 2011 at 5:07 p.m.
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pubsrus: what i meant is that because of the bankruptcy, a lot of GM workers have had to transfer. some from Spring hill, others from janesville and lake orion Mi and a few other plants. they transferred a lot of good quality people when they transferred people from spring hill and janesville.
Sep 23, 2011 at 5:06 p.m.
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916WI, your comment is totally bizarre. At least during WWII we paid for the effort through our own blood and sweat and higher taxes that went into the pockets of hardworking Americans building American war machinery. Gross debt relative to GDP rose to over 100% to pay for WWII, so everyone sacrificed including GM. Instead of borrowing from our enemies to pay for the war like they did for Iraq and Afganistan, you're going to complain about the cash that came flowing back into American bank accounts? Are you just anti-labor union or are you some kind of an Anti-American or Communist? You sure don't sound Pro-American by your statement.
Sep 23, 2011 at 2:30 p.m.
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Consider one other really scary thing. If we ever had to go back to a war-time production, where would that happen today? We have allowed so much of our manufacturing to go overseas that we are severely lacking in this capacity.
Sep 23, 2011 at 1:40 p.m.
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So basically what you're saying pubs is that General Motors made a massive amount of money off of the war. We all know how lax the government is when spending taxpayer dollars. I wonder what GM's margins were on some of the products that they sold us. The cash must have literally been flowing into their bank accounts!!!
Sep 23, 2011 at 1:05 p.m.
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Hey ezoner...here's a history lesson for you:
1942, Production Goes to War
General Motors converted all of its production to the Allied war effort and delivered more than $12 billion worth of goods, ranging from airplanes to tanks, marine diesel engines, trucks, machine guns, and shells. No other manufacturer delivered as much material to the Allied forces.
Here is a list of the WWII General Motors War Material Production 1940-45: (This is the best list I could assemble from the contemporary sources at war's end)
198,000 Diesel engines for tanks & landing craft
206,000 Airplane engines
13,000 Complete bombers and fighter planes
97,000 Aircraft propellors
301,000 Aircraft gyroscopes
38,000 Tanks, tank destroyers and armored vehicles
854,000 Trucks, including amhibious DUKWs
190,000 Cannons
1,900,000 Machine guns and submachine guns
3,142,000 Carbines
3,826,000 Electric motors
11,111,000 Fuses
360,000,000 Ball and roller bearings
119,562,000 Shells
39,181,000 Cartridge cases
540,619,000 Grand Total
To this day, the government has not forgotten GM's contribution. Some stupid people have but not those who truly remember.
Sep 23, 2011 at 12:58 p.m.
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Hey grandys618 and dawolfman75......the vast majority of those that work at Spring Hill never were from Tennessee so I guess I missed the point of going home. All those who transferred to the Saturn plant at its inception all came from the north.
Sep 23, 2011 at 11:27 a.m.
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Why in the world would anyone want to open up a auto factory in Janesville? The last one here ran by union thugs brought billions of global dollars into this community to more than 2,000 single breadwinner families annually for 90 years! Shame, shame, shame. What are they thinking? Settled families like the Cullens, Ryans, Blains and Bliss built businesses and made fortunes selling their products to these middle-class thugs. Shame, shame, shame. Local governments and school districts were able to pass balanced budgets without riots on their hands. Shame, shame, shame. If they attempt to open the auto factory in Janesville - we should start a riot and stop all the shame.
Sep 23, 2011 at 11:26 a.m.
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I'm telling you -- the union will drive them to not invest in the US. THe next move will be offshore. Dealing with unions and their bloated pay and compensation, the increased regulation. Plus --
Why buy a government supplied GM vehicle. I would prefer to buy a Ford where at least they didnt accept a handout and they didnt screw investors ..... GM should have been shut down and broken up for sale.
Sep 23, 2011 at 11:06 a.m.
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Them darn union thugs and their peaceful protesting! What happened to the good ol' days when company thugs ran things? Oh yeah, the Fitzgeralds are in politics now....
Many people also forget there is a newer section at the plant. Depending on the product, they may only need that. Then they can have suppliers use the older area to create a more efficient just in time supply line.
Sep 23, 2011 at 10:52 a.m.
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Union Thugs . . LOL makes me laugh every time!!
Sep 23, 2011 at 10:11 a.m.
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Even before government involvement GM made decisions that don't make sense like the government. I worked in OKC and they shut us down, a state of the art facility by comparison in every way. I work now in Kansas and that plant even though it was built after OKC is a way behind facility. I recently talked to an engineering person about the differences and I heard a mouthful, he came from OKC as I did. Why GM would want to keep an old dilapidated structure on "standby" mirrors the government's way of doing things.
Sep 23, 2011 at 9:46 a.m.
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grandys- You're not helping your cause to sound educated when you spell congratulations with the letter D in it, or when you omit the last letter E in Tennessee. So exactly how "educated" are you on the topic of organized labor?
Sep 23, 2011 at 9:46 a.m.
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I do know that Cullen's has re-worked the paint department and moved it downstairs.
Sep 23, 2011 at 9:18 a.m.
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Dream on -- not gonna happen -- never ,never, never, not with the union thugs in this state.
Sep 23, 2011 at 8:36 a.m.
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I love their next in line statements AFTER Springhill.
Sep 23, 2011 at 8:30 a.m.
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They should make the S-10.
Sep 23, 2011 at 8:23 a.m.
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Just as well they don't get any Colorado product, a mediocre truck at best, and overpriced for what you get.
Sep 23, 2011 at 8:13 a.m.
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I am not being a pestimist here, but I am a realist. MOVE ON PEOPLE! What is going to happen will happen, but I just do not see this plant opening. This plant is old and not conducive to being retooled. It would be an exorbitant expense for GM to do that. I do hope they do, but realistically I just do not think it is going to happen.
Sep 23, 2011 at 7:59 a.m.
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The new Colorado product is going to be built in Wentzville MO.
Sep 23, 2011 at 7:05 a.m.
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an assesment done by GM a few months ago put re tooling janesville and Spring hill both at about $350 million. will probably be more depending on what they put in there. also, length of time depends on what they put in there. 12-18 months would be good guess. and by the way, the new contract puts the colorado and canyon in Wentzeville Mo. there are several new products coming out very soon however.
Sep 23, 2011 at 1:41 a.m.
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The Spring Hill rehab in 2007-08 was around $800M, kangaroojack. Starting from scratch again, probably close to $1 billion. With a B. That's what Volkswagen Chattanooga, the most recent new auto plant in the US, cost.
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I would estimate bringing it back online to take 18-24 months.
Sep 23, 2011 at 1:06 a.m.
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OK heres something to think about. Lets say they do reopen it. How much $$$ is it going to take just to fix the building? How muchmore to put in the equipment that was removed or left in disrepair?
Sep 22, 2011 at 11:52 p.m.
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As I said yesterday, we'll need to see how GM's sales continue to improve, or level off. If the latter, they will probably remain under capacity, even with the reduced number of facilities owned by "New GM". Still, adding capacity has a lot of factors, such as whether they can actually produce the type of vehicle needed at a facility. Bottom line is that this is something to be measured across the next couple of years or more, not an immediate prospect, so I don't know why everyone needs to get so excited one way or the other.
Sep 22, 2011 at 11:51 p.m.
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Frogger, first, I would suggest you use spell and grammar check before you post your message. Second, what "rumars" are you referring to?
Sep 22, 2011 at 11:45 p.m.
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Word on the street that Janesville will get a new Colorado line.
Probably not true, but that's what I actually overheard on an actual street and am so duly reporting.
Sep 22, 2011 at 5:30 p.m.
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why frogger why?we dont want to stop the rumors lol,the plant will re-open just keep the rumors going and im so sure it will happen.everyone is waiting patiently hahhahahahahahahhahahahaha
Sep 22, 2011 at 4:55 p.m.
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Her eis my thought. They will add a third shift to every plant before opening this one. STOP with the rumars!!
Sep 22, 2011 at 4:37 p.m.
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my sentiments exactly grandys618. many from spring hill will get to go home now. hats off to them.
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