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GM confirms plans to produce small car in Michigan

JANESVILLE — The oldest plant in the General Motors Corp. family faces an uncertain future after the automaker decided against bringing new production to the recently shuttered facility in Janesville, Wis.

Instead GM chose the plant in Orion Township, Mich., about 40 miles north of Detroit, to build its next-generation small car. Wisconsin officials, who had hoped GM would return some 1,200 workers to the local production line, expressed concern and disappointment at the decision, but one former autoworker wasn’t surprised.

GM confirmed the plant selection in a statement Friday, but said the decision is dependent on the outcome of negotiations between the company and the state on incentives.

The other site under consideration was Spring Hill, Tenn.

The Janesville plant would remain in “standby capacity,” meaning it could be reopened in the future if market demand increased, GM said. It was originally placed on standby in May, one month after all production there was idled.

Wisconsin Gov. Jim Doyle said Friday he knew his state was facing an uphill battle against Michigan but said state and local officials still put together a competitive incentive package. The Democratic governor said he was “deeply disappointed” by the decision.

“I do not believe that Michigan matched us,” he said in a statement. “I certainly hope that we were not used to simply leverage more resources for Michigan.”

Other members of Wisconsin’s congressional delegation were similarly disappointed. In a joint statement, U.S. Sens. Herb Kohl and Russ Feingold, as well as U.S. Reps. Paul Ryan, R-Janesville, and Tammy Baldwin, D-Madison, pledged to continue working on behalf of affected citizens.

“The Janesville, Beloit, and Kenosha communities are facing a lot of challenges because of the downturn in the auto industry,” the statement said, “and we will continue to work to help these cities as they seek to access the federal resources that are available to auto communities.”

Douglas Venable, Janesville’s economic development director, said local officials would gather to discuss options for the GM-owned plant and its 4 million square feet of space. GM might bring production back in 2011 if business improves, he said, though city officials could encourage the automaker to sell so other businesses can bring in jobs.

“The uncertainty is the difficult part,” Venable said. “At some point families have to decide what they’re going to do, if they’re going to transfer elsewhere. And the business community, it’s hard for them to make investments not knowing if GM is staying or going.”

State and city officials would likely “regroup,” absorb the bad news and meet as early as next week to plan next steps, he said.

One former autoworker, 47-year-old Vicki Sathre of Janesville, said she had hoped GM would reopen the local plant but suspected the stamping facilities at the Michigan site made it the more logical choice. Sathre, who took a $20,000 buyout in April after 12 years at the plant, said she didn’t put much stock in GM’s claims that it might reopen the Janesville site down the line.

“You can’t live on a wish and a dream,” said Sathre, who is studying to become a dental assistant.

Janesville, a town of 60,000 about 75 miles southwest of Milwaukee, has one of the worst unemployment rates in the state.

Janesville’s unemployment rate for May was 14.3 percent, slightly improved from 14.7 percent the previous month but still nearly twice the rate from a year ago.

Its SUV production plant was the oldest facility in the GM family. It was built in 1918 for tractor production and converted to a Chevrolet plant in 1923.

Over the years, workers churned out sedans and SUVs, including Chevrolet Suburbans and GMC Yukons. But demand for big vehicles plummeted last year during the days of $4 gas and failed to recover when fuel prices came down.

GM ended SUV production last year two days before Christmas, cutting 1,200 jobs. Another 100 or so workers were retained for four more months to wrap up some contract work.

Doyle said earlier this month the state offered GM a package of incentives to reopen the Janesville plant. He declined to describe the package except to say it would be a significant investment by state and local taxpayers.

The governor had said he hoped GM would reopen the Janesville plant on the strength of the incentives package, the city’s history of making popular vehicles and a union contract that was more flexible and competitive than the ones the other plants offered.