General Motors’ Janesville plant is scheduled to shut down on Dec. 23, leaving many jobless and raising questions about the future role of GM in the area.
Earlier this summer, GM announced that the plant, which currently manufactures trucks and sport utility vehicles, would close by 2010. The earlier-than-expected closing of the plant will affect about 1,200 employees, according to GM spokesperson Chris Lee.
Due to gas prices reaching $4 per gallon this past year, GM has suffered a huge hit to their SUV and truck sales, which ultimately drove the decision to close the plant, according to Lee.
“The decision was made based solely on market trends and the dramatic shift from consumers away from SUVs,” Lee said.
While GM says the amount of workers that will be affected is around 1,200, Bob Borremans, executive director of the Southwest Wisconsin Workforce Development Board, said that the number will be greater.
“There are two different groups affected: the GM production facility and the supplier business that makes all the parts, putting 1,500 to 1,600 additional people out of jobs,” Borremans said.
Along with the employees directly affected by the plant closing, other businesses in the area like restaurants and retail businesses will be also negatively affected, according to Borremans. He projects between 8,000 and 9,000 total individuals in the workforce to be affected.
Carla Vigue, spokesperson for Gov. Jim Doyle, said the state is doing all they can to help these displaced workers, and that the closing of the plant in Janesville is something that will hit all of Wisconsin.
“The state is absolutely committed to making sure that people affected by the closing are provided with the resources they need,” she said. “The Wisconsin Workforce Development Program has a number of programs to help these people.”
Residents and local officials continue to remain optimistic about their future, hoping that GM might stick around and use the plant to manufacture smaller vehicles or other more fuel- efficient cars.
“Gov. Doyle and local union officials and community leaders have been working with GM to find ways to keep them here in Janesville,” Vigue said.
The Janesville GM Retention Task Force presented an incentive package to GM last month in efforts to convince workers to stay in Janesville. Yet, Borremans said that the possibility of this happening is slim.
“The problem is that GM has excess employees, and with their stocks plummeting in recent weeks, they just don’t have the cash to pay for these people,” he said.
Along with the issue of unemployment comes the debate overabout whetherif Wisconsin can recover the $10 million in grants given to GM in 2004 to help finance the plant. Vigue said some money can be recovered, but the millions of dollars already spent won’t be recovered.
The closing of this plant is one of many for GM. Vigue said this is a reflection of the current American current economic crisis and how it affects Wisconsin.