Historic GM Factory That Survived Depression to Close

This hard-scrabble city's General Motors plant has withstood storms, the Great Depression and a world war. But it couldn't survive high gas prices.

GM announced Monday it would shut down the plant in two phases. Sport utility vehicle production will end Dec. 23, leaving about 1,200 people out of work. About 40 workers will stay on through May or June to complete a light truck order for Isuzu. Then the doors to the sprawling complex will close.

City leaders estimate those job losses could affect 4,000 to 6,000 other jobs in Janesville such as suppliers and restaurant workers who depend on the plant for business.

"Obviously, it makes me heartsick," said City Council President Amy Loasching, a plant worker herself.

The plant has been a fixture in Janesville, a blue-collar city of 60,000 about 45 miles south of Madison, for most of the past century, employing generations of residents. But rumors have been swirling for years GM planned to shut it down. Rounds of buyouts and layoffs in recent years only stoked those fears.

In June GM finally announced the plant would be among four to close by 2010, saying high gas prices had hurt SUV sales. Monday's announcement set a hard date.

State and local officials promised Monday to keep trying to persuade GM to retool the plant for a new line of vehicles, but workers and others here greeted the news with grim acceptance.

"Even though we were gearing up for it, the reality is here. It's just a case of the economy running away from the product we make," John Dohner, Jr., head contract negotiator for the plant's union, United Auto Workers Local 95.

Stone-faced workers streamed out after their shift ended and had to face reporters and television cameras waiting for them.

"Reality bites," said Rich Granlund, 56, of Janesville, who spent the last 29 years working at the plant. He said the workers have earned a chance to build a new product line.

"I think we deserve it," he said. "Seventy-five years the plant was here. You know, generations and families. It's been a good plant."

According to the Wisconsin Historical Society, GM bought the plant from Samson Tractor Co. in 1918 and built tractors there. By 1923 the plant was turning out Chevrolet cars.

It closed temporarily during the Great Depression. Chevrolet production resumed in 1934. In 1942, during the height of World War II, the plant turned to producing munitions.

Chevrolet production resumed after the war. In 1981, Chevrolet discontinued full-size auto assembly there and the plant closed for four months to retool for production of front-wheel drive vehicles. Throughout the rest of the 1980s it built compacts. Employment peaked in 1985 at 7,200 workers, said Doug Venable, the city's economic development director.

The plant began making pickup trucks and SUVs in 1991. Some of the vehicles the plant produced included the GMC Yukon, the Chevrolet Tahoe and Chevrolet Suburban. But sales of those SUVs have plummeted as gas rose to $4 a gallon earlier this year.

The plight of GM's plants has drawn the attention of both presidential candidates.

Republican John McCain issued a statement over the weekend saying he was disappointed the four GM plants were closing. Democrat Barack Obama, who made a campaign stop at the Janesville plant earlier this year, issued a statement Monday saying that as president he'd work with automakers to produce fuel-efficient cars that will create jobs.

Meanwhile, U.S. Sens. Herb Kohl and Russ Feingold, both Wisconsin Democrats, along with U.S. Rep. Paul Ryan, a Janesville Republican, all issued statements saying they hoped GM would relocate a product line at the plant.

Loasching said federal, state and union officials met with GM in September and offered the company's leaders an incentive plan to stay in town. Both Loasching and Lee Sensenbrenner, a spokesman for Gov. Jim Doyle, declined to comment on the package.

GM spokesman Chris Lee acknowledged those negotiations continue, but said they won't change the company's decision to end SUV production in Janesville.

Loasching said union workers' contract calls for paying them 85 percent of their regular salary for four years, but that deal won't help other business that depend on the plant.