Those behemoth, fuel-hungry sport-utility vehicles, or SUVs, recently so popular with American drivers, just aren't selling like they used to. General Motors found out just how much they aren't selling in its first fiscal quarter, when the company lost $1.3 billion. That's hard news for the world's top-ranked automaker, and now GM plans to cut 25,000 of its 111,000 jobs by 2008 to recoup those losses.
The news has many employees pondering their future, including those at the Janesville, Wisconsin, plant. Yet, many are optimistic they'll survive the chopping block.
The first thing you notice when you walk up to GM's Janesville plant is that it's old. Really old. Workers stream in and out of a patchwork campus of grimy buildings... as they have since 1919, when it first opened.
At the south entrance, dozens of trucks are lined up at the plant's loading docks. They're delivering parts for the vehicles made here, including the Chevy Suburban and GMC Yukon. But high gas prices and tough competition have paved the way for a possible shutdown here, which would mean nearly 4,000 workers laid off from the plant.
James Jacobson has been a line inspector here for 19 years. Tonight, he's enjoying a cold beer at Zachow's Tavern, a popular watering hole near the plant. While generally quick with opinions on politics or the workplace, Mr. Jacobson's less outspoken on where the Janesville plant is headed. "Who knows, who knows," he says, shaking his head. "Look at the corporation, you never know."
Mr. Jacobson says he knows that he wants to stay at the plant.
"There's a bunch of good people in there, and they'll do the best they can. It's pleasurable work, I enjoy what I do, just building the trucks and doing a good job." He says it's a decent living with fair wages.
James Jacobson and his friends have no idea what's in store for them, but hope to avoid the same fate that hit GM plants in Baltimore, Maryland, and Lansing, Michigan. Those shutdowns left 2,000 workers with pink slips and uncertain futures.
Calls to the president of United Auto Workers Local Union 95 of Janesville were not returned, but Ronnie Thomas, a retired GM worker and vice-chair of the local retirees union, says he's confident that labor leaders will work things out without resorting to hardball tactics like strikes and walkouts. "General Motors has its ups and downs just like our union does, " he says, "and I think all they have to take to the table is reminders of what our good workforce is, our reputation as building quality products, and I don't see any reason why the workforce won't continue to do that."
Mr. Thomas and other old-timers say rumors of a shutdown are almost as old as the plant itself. And many state residents say that the Janesville factory is in good standing. Last year, General Motors invested $175-million to renovate and retool the plant's body shop and general assembly areas, while the state Department of Transportation put in a new road for truck traffic.
Wisconsin's Secretary of Commerce, Mary Burke, says she can't believe GM would close the plant. "I think that with the product lines that we make down in Janesville, with the amount of money that has been put in recently to retool for these new lines, and the improvement in efficiencies that have come in the last couple of years," she says, "all are really good signs that Janesville will remain open."
Still, many workers admit they're nervous. Some say if the Janesville plant goes, the town will suffer. Ron Pohlman has been at GM for 29 years, and says 4,000 lost jobs would be hard to recover from. He says a saving grace may be the so-called "900 Project," which aims to remodel two of GM's SUVs -- the Tahoe and the Suburban -- to be more energy efficient. "[The Suburban] will have the hybrid engine in 2007," he explains. "We're hoping that it really sells. If it really sells, then we can have 3 plants building this vehicle and if people buy it, we'll then be fine."
The shift towards hybrid-vehicles is seen by analysts as an important -- if belated -- turn for General Motors. The imported hybrids from Toyota and Honda are among the fastest-selling vehicles in the United State, and American carmaker Ford has its own hybrid competing for car buyers. But even with the 900 Project on the drawing board, General Motors will still have to chop away at its labor force to stay profitable.
Some industry-watchers predict the older plants will be the first to go, though corporate heads aren't saying just how they'll decide, a fact that makes Ron Pohlman a little anxious. "It's just up to the big shots at GM to decide who they're going to close or who they're going to get rid of. And we just gotta do the best we can and just hope for the best. There's not really much else we can do!"
In the meantime, Mr. Pohlman and his co-workers at the Janesville Plant will keep the Suburbans and Yukons rolling off the assembly line.