Workers at the General Motors Assembly Plant in Janesville breathed a sigh of relief Monday when GM announced the factory would not be included in a broad series of layoffs and plant shutdowns aimed at reducing the struggling auto company's costs.
GM decided to shut down nine assembly, stamping and powertrain plants, and three service and parts operations facilities in the United States and Canada — amounting to a total of 30,000 layoffs. But it opted to keep the Janesville plant running, guaranteeing the site — GM's oldest operational plant — will continue to employ its 3,900 workers in spite of circulating rumors that GM would shut it down.
Janesville native and U.S. Rep. Paul Ryan, R-Wis., said in an e-mail that GM's decision to retain the Janesville site "is a testament to their top-quality manufacturing and productivity."
Additionally, Ryan said existence of the Janesville plant is vital to the health of the city and the state of Wisconsin.
"The Janesville GM plant is crucial to Wisconsin's economy and the many businesses that work with and supply GM and its workers," Ryan said. "As the old saying goes: as goes GM, so goes Janesville. This announcement is great news for our whole area."
The cutback will mean a 22 percent reduction in GM's union workforce and represents the company's attempt to slash costs by $7 billion by the end of 2006.
GM CEO Rick Wagoner said the company's reforms are part of a strategy to revamp flagging profits and productivity. GM employees in Oklahoma, Michigan, Tennessee, Georgia and Ontario received word they will no longer have jobs with the company due to the cuts.
"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," Wagoner said in a statement to employees. "But these actions are necessary for GM to get its costs in line with our major global competitors."
Though there was outside speculation that the Janesville location was facing closure, GM Janesville Assembly spokesperson Carolyn Markey said officials at the plant were not anticipating such an action by GM.
"We were not impacted by the announcement," Markey said. "We are focusing on an upcoming launch of our full-sized SUV."
Melanie Fonder, press secretary for Gov. Jim Doyle, said the GM announcement was tensely awaited because the fate of the plant remained in question until Monday.
Not only were thousands of jobs at stake, Fonder said, but also Wisconsin as a whole had poured millions of dollars into GM's presence in the state.
Two years ago, GM received a $1.5 million grant for a Hudson distribution center. Since then, the state gave GM a $10 million incentive package for training and assistance to complement GM's $175 million investment in the Janesville plant to initiate production of a new line of sport-utility vehicles.
Doyle and several other legislators appealed to GM to keep the Janesville site and its nearly 4,000 employees, Fonder added.
"Particularly in the past few years, the governor's administration has provided a number of grants to support the expansion of the facility," Fonder said. "[The Janesville Assembly Plant] is very important to the economy and the governor is very pleased that [GM] has decided to maintain our operations in Janesville."
State Sen. Judith Robson, D-Beloit, said in a release she feels for the communities affected by the GM cutbacks, noting the Janesville plant was severely threatened by the potential closure.
Kelley Flury, a spokesperson for Robson, said if GM were to leave Janesville, the community would lose the "backbone of its economy," creating a significant economic hardship.
"The GM plant provides a good quality of life and standard of living in Janesville and the surrounding areas," Flury said. "The good-paying jobs and taxes that GM pays have a positive ripple effect through the Wisconsin economy."
