The GM auto plant in Janesville, WI is the company’s oldest in the country. Remember that television jingle we grew up hearing about Chevys being the “Heartbeat of America� I think they were actually referring to Janesville. Opened in 1919, it survived both the Great Depression and WWII. The place is an institution. And according to GM CEO, Rick Wagoner, that institution is going to close by 2010.
The GM auto plant in Janesville, WI is the company’s oldest in the country. Remember that television jingle we grew up hearing about Chevys being the “Heartbeat of America� I think they were actually referring to Janesville. Opened in 1919, it survived both the Great Depression and WWII. The place is an institution. And according to GM CEO, Rick Wagoner, that institution is going to close by 2010.
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This is but one of four SUV-producing auto plants that will be feeling the pinch of corporate belt-tightening, as production costs soar and public opinion of larger, gas guzzling cars wanes. Along with Ford and other automotive manufactures, GM intends to focus more production on smaller, more fuel-efficient vehicles as we witness the “structural†rather than the “cyclical†change of the auto industry, according to Wagoner. Wagoner even said that the company will take the Hummer under “strategic review,â€hinting at possibly selling off the once immensely-popular line. For all intents and purposes, this symbolizes a win in the war against the fuel-inefficient, impractical SUV that has haunted many of us for years now.
However, in as much this is a victory, what are often neglected are the consequences of these kinds of significant shifts. While GM shares rose in midday trading on the wake of this announcement, autoworkers from Ontario, Canada to Toluca, Mexico were wondering what they were going to do next. In Janesville, the GM plant for generations had practically been the city’s entire economy. And if previous plant closures serve as any kind of precedent (GM cutbacks in the late 80’s leveled 4,000 jobs practically overnight in Norwood, Ohio, nearly 1/6 of the city’s population), the roughly 2,500 workers employed in Janesville could have a very bleak future as GM has no plans to bring any new auto lines into the plant to replace its SUV and mid-size truck production. Though state of the art, the facilities at Janesville are highly specialized for larger vehicle production, and for GM it is much more cost-effective to switch resources elsewhere.
As many other cities similarly affected by these types of closures have been paralyzed, Janesville on the other hand seems to be taking a very optimistic attitude in a very frighteningly uncertain time, a situation many of us on the outside view with ambivalence.
Reported in the Milwaukee Journal Sentinel early this month, business leaders in Janesville have “quietly, to avoid fueling rumors†discussed how the city would respond if a closure like this would ever happen. Though the loss of the plant will nonetheless be a huge blow to the city's economy, sending a ripple effect through smaller manufactures in the area supplying parts to GM, community officials recognized a long time ago the importance of economic diversification. “Not having the plant is more of an incentive to do so,†according the Journal Sentinel. In recent years, officials laid the groundwork for more than $150 million in industrial development, the majority of which has nothing to do with GM or cars.
Spanning more than 4 million square feet, the soon vacant GM plant could transform into an industrial park or even a regional transportation hub. "The property has excellent utilities, railroad access and a new four-lane road," according to Doug Venable, Janesville’s Economic Development Director. And looking again at the example of Norwood, Ohio, after the closure of its GM plant, city officials converted the space into a mixed-use business park, revitalizing the economy, replacing practically all the jobs that were lost, and bringing in millions of dollars in investment. Janesville officials have been understandably reserved about talking about plans, but they have no doubt not taken Norwood’s example lightly. Some have even hinted at retooling the plant for smaller or green products, for “products that have a brighter future,†in the words of Laura Dresser, associate director of the Center on Wisconsin Strategy at the University of Wisconsin-Madison.
Readers: What do you think? For every Janesville and Norwood, I can imagine there can be just as many other places that fail to be as proactive. Is there a price, then, that we are paying to witness the transformation of the transportation industry?
