Press conference this morning: Janesville GM plant to close by end of 2009 (Last day of full production 12/23/2008)

[FVBrewerFan]

I brought it up not because I relsih the fall of GM. My father worked his whole life in a factory (not GM.) I have family members who still work in factories. I would never relish anyone loosing a job. Also, I didn't claim in my post that unions are the sole reason for the plant closing. That would be overly simplistic.

 

I have been around for awhile, and I know what the union mentality does to a company, beyond the higher costs the employer bares in payroll, benfeits, and pensions. It's the "to hell with it, I don't have to do that" attitude that is almost as big of a problem as the finanical side.

 

Now, to cut down a couple myths. This attitude of "it's OUR fault for not buying GM vehicles!" is dated. It's 2008, and if I want a Toyota Tundra I will get one. That's the free market. I do have 3 American vehicles at the moment, but I have purchased foreign vehicles before, and I'm sure I will again in the future.

 

Finally, even if GM could have anticipated the economy, gas prices, etc. they're still left with a TRUCK plant. If anything, I would argue they would have closed that plant much sooner if they scaled back on truck production. GM has plenty of hybrids, just as all the big automakers. Fact is, most people still don't want them. I want a big gas guzzling truck, and a gas guzzling sports sedan. I may hang on my vehicles a year longer for now, but when I will replace them with similar vehicles. I would imagine there's a whole lot of people in the same boat.

[craigharmann]

The problem I see is that American car makers keep thinking that people will come back to the large gas guzzlers, and the foreign makers are making smaller, more fuel efficient cars. The American companies can't sell them, and the foreign makers can't make them fast enough. I think foreign makers adapt to the needs of Americans better than American makers do.

It really comes down to a quality product. 4 years ago, when I was looking at purchasing a new vehicle, I looked at everything on the market. I ended up getting a Toyota Matrix, and in the 4 years of owning it, I've only had to put new tires on it. I looked into depreciation, maintenance costs, and the Toyota hands down to me, was the best vehicle for the price. Our other car is a 2000 VW bug. Good quality car (that only cost us $1), that gets good gas mileage and won't cost much for maintenance. As the gas prices continue to go up, more people will be looking for cars and trucks that get good gas mileage and don't cost $75 to fill up at a shot.

 

[Patrick425]

I don't know about you, but a good quality report from JD Power or Consumer Reports isn't gonna rush me to the nearest Chevy dealer.

That's exactly how I buy cars. I look at Consumer Reports. Most of the top cars on consumer reports are foreign cars. I never ask a friend or coworker or listen to someone say "Oh, I have a Chevy Impala and I love it" or "I have a Toyta Camry and it's been nothing but trouble". Anyone can have a bad or good experience with a car. That does not mean that most of the cars of that model or type will be the same. CR does pretty thorough testing and gets feedback from it's population of subscribers. Why would you find it silly to use a resource like that when shopping for big ticket items? You'd rather just go by looks and how it feels during a 15 minute test drive?

[1992casey]

Let's stop saying "Jap" and "Japs."

[FVBrewerFan]

I don't know about you, but a good quality report from JD Power or Consumer Reports isn't gonna rush me to the nearest Chevy dealer.

Why would you find it silly to use a resource like that when shopping for big ticket items? You'd rather just go by looks and how it feels during a 15 minute test drive?

OT...but I can't resist. That's the beauty of human psychology. Some people will spend tons of hours on the internet for every detail on the purchase, others drive up to the dealership, look at a car and buy it on the spot. Neither is right or wrong, people are just weird.

[Patrick425]

OT...but I can't resist.

Yeah, sorry about that. I did kind go in another direction there.

[Teatoe993]

I don't know about you, but a good quality report from JD Power or Consumer Reports isn't gonna rush me to the nearest Chevy dealer.

That's exactly how I buy cars. I look at Consumer Reports. Most of the top cars on consumer reports are foreign cars. I never ask a friend or

coworker or listen to someone say "Oh, I have a Chevy Impala and I love it" or "I have a Toyta Camry and it's been nothing but

trouble". Anyone can have a bad or good experience with a car. That does not mean that most of the cars of that model or type will be the same. CR does

pretty thorough testing and gets feedback from it's population of subscribers. Why would you find it silly to use a resource like that when shopping for

big ticket items? You'd rather just go by looks and how it feels during a 15 minute test drive?

 

 

I don't find it silly at all. What I do find silly is people thinking that these report are gospel and make their decisions solely based on a good or bad review. People need to know what they want in a vehicle, find and research the vehicles that fit those characteristics, then drive the vehicles. I can't count how many people research and research like mad when looking for a car, but never go and drive any of them until they buy them.

[Invader3K]

Personally, I'm a big test drive guy. I spend a ton of time in my car (I drive put over 20,000 miles a year on it), so a car has to have a good feel, handle well, and be comfortable to me. Good gas mileage is also important.

 

Four years ago when I decided to buy a new vehicle, I went to the local GM plant...test drove four different vehicles, and was relatively unimpressed by what I could get in my price range. Went down the road to the Chrysler/Dodge dealer, drove a Chrysler...and found out I could get a car that looked and felt much better, and had better performance, for about three grand less than what GM was offering at the time. So, obviously I bought that one.

 

My wife has a Pontiac Vibe we bought brand new about three years ago, and that one has had all sorts of little mechanical problems. I'm guessing the engine will hold up forever, since that was a co-design with Toyota.

 

Anyway, that's really neither here nor there, just my own personal experience.

[FVBrewerFan]

I bought a piece of crap used Volkswagon Jetta once, just because the sales chick was hot...

[rluzinski]

Why else would the American consumer buy a foreign vehicle if it wasn't for a better product?

 

Perception of a better product. For years, a person could assume that japanese cars had better quality. For years, they were correct. Quality reports seem to suggest that the gap between domestic and foreign vehicles has been erased but perception appears to be lagging. Of course, when you make an inferior product for years, it's going to take a whole to erase that perception.

[TheBwaz]

I have an Impala and I love it, even though like Melvin it was made in Canada. My neighbor has a Subaru made in Indiana and my folks have a Honda from Ohio.

 

About 14 years ago, GM made a bet that gas prices would remain the same in the US more or less forever. They made large trucks (and some cars) that were not so fuel efficient. So now a plant that makes large trucks is getting closed because gas has risen and will probably never go down again. I don't gots an MBA or nuttin, but that seems to make sense.

 

Where GM is really hosed is in its legacy costs. The folks who have been hired in the last 15 years or so don't have the deals their dads and granddads had. Its the past guaranteed benefits that are KILLING them (pensions, all expenses paid medical care for life, free legal representation, etc.) What has also been killing GM and the other domestics is being about 5 years behind every trend in cars that people want. Its a perfect storm now, and all hands on deck.

[RockCoCougars]

It's the union's fault? You guys need to get a grip on reality. It's the fault of the American consumer. If everyone that bought a foreign pickup/suv had bought a GM product instead, that plant would be expanding rather than closing. And before you cry "quality" you need to take a good look at a JD Power report and/or other independent research; American vehicles are among the highest quality out there. It is no longer the 1970's.

Sharp post. Not sure when it became "trendy" to own a Honda, Toyota or the like, but it's the thing to do these days for the young, hip, intellectual crowd - kind of like getting a tattoo or watching "The Office". Kind of funny how the same people who won't shop at Walmart will blissfully drive to Whole Foods in their Accords.

[Invader3K]

I don't know if Honda or Toyota are exactly seen as trendy brands. I know a lot of non-hipster people that own them because they are reliable and economical. Go figure.

[TheBwaz]

I am a non-tattooed "Office" watcher who has a 13 year old Saturn and 3 year old Impala. Even if everybody who bought a Highlander or Pilot had bought a Yukon or Suburban instead, the plant would still be hosed. Large SUVs will still have their place, but the days where they don't say "Park Ranger" or "Sheriff" on the side are over. At 4 bucks a gallon owning something that realistically gets 10 miles a gallon just don't fly (EPA estimates are fiction).

As for Wal-Mart, no problem, but everything there is made in China. At least at Whole Foods (who doesn't exist; Go Outpost!) the occasional item is grown in this state.

[Roscoe Chill]

Fault of the American consumer? So I should buy a Cavalier or a Focus or a Neon because it's built in the US? Give me a break. I'll take my Honda. I've had a Chevy Cavalier, Mercury Topaz, Pontiac Grand Am, Dodge Raider, Buick Regal, Chevy S10, Buick Riviera, and a Honda Civic in my life. It's finally nice knowing A) that I will get better than 20 mpg, and B) I won't be spending $500 every 6 months in repairs.

[LouisEly]

In an earlier post a comment was made that the U.S. assembly plants for foreign/Japanese car companies pay lower wages and benefits. That is not true. They pay the same wages and benefits; they just aren't saddled with the liability of the benefits to thousands of retirees. (Not to generalize or stereotype, but the American factory worker on average is not someone who eats healthy, exercises regularly, doesn't smoke, and drinks in moderation, so those health care benefits are not cheap.)

 

Also, the factories owned by non-U.S. based car companies are newer and more recently built, so statistics may show that the average worker at those plants makes less than the average at a Big Three plant, but that is because the non-U.S. based companies' plants haven't been around as long so they don't have people who have been there 30 years (and thus accumulated more wage increases, vacation, etc.). They technically may make less at those plants, but that is because of tenure. On a per-hour basis, equal tenure, they pay the same wages and benefits.

 

Edit - it won't make Janesville a ghost town, but it will have a big impact. A lot of restaurants, contractors, services, etc., rely on a lot of business from those workers. So it is going to have a ripple effect that will impact a lot more than 3000 people.

[owbc]

Fault of the American consumer? So I should buy a Cavalier or a Focus or a Neon because it's built in the US? Give me a break. I'll take my Honda. I've had a Chevy Cavalier, Mercury Topaz, Pontiac Grand Am, Dodge Raider, Buick Regal, Chevy S10, Buick Riviera, and a Honda Civic in my life. It's finally nice knowing A) that I will get better than 20 mpg, and B) I won't be spending $500 every 6 months in repairs.

That's the #1 key--gas mileage. Say what you want about unions, management, consumers, the economy, etc. What is hurting the American automakers is that Honda and Toyota anticipated the rise in gas prices and were ahead of the curve in manufacturing fuel efficient cars. GM and Ford still don't have a match for the Prius.

 

Also, GM can't change the reliability perception overnight. Even if the reliability gap between Japanese and American automakers has shrunk, there is still the widespread perception that American cars are inferior. My parents just recently sold their 1991 Toyota Previa with 165,000 miles--it only had ever needed minor (under $500) repairs. Their neighbors have the same model with over 250,000 miles. When it came time to buy a new van, they chose between the Toyota Sienna and the Honda Odyssey--and why wouldn't they? And of course, their 21-year-old son (me) is going to be buying cars fairly soon--and it would take quite a bit of convincing to make me forget how nicely that van drove despite being 15 years old.

 

Still, it's a shame to lose Wisconsin jobs. When I heard the news, I was hoping that it would be a temporary close in order to convert it to some sort of hybrid plant. GM needed to do something, though, as ten years from now, gas could easily be $6-$8/gallon.

[Invader3K]

Still, it's a shame to lose Wisconsin jobs. When I heard the news, I was hoping that it would be a temporary close in order to convert it to some sort of hybrid plant. GM needed to do something, though, as ten years from now, gas could easily be $6-$8/gallon.

Ten years? Try next year. Heck, we could cross six dollars by the end of this year, yet. I don't put it past our government to do nothing about the situation.

 

[fondybrewfan]

Oil has been trending down the last 2 weeks and many analyst feel this is the start of a major correction, so unless those people are completely wrong or if we have a nasty hurricane season, I don't see prices getting that high this year at least. But you never really know what is going to happen with the Middle East the way it is.

[SenatorShriv]

Everybody and their brother should have seen this coming. GM and Ford dug in against raising the CAFE standards for years and insisted that they couldn't possibly make more fuel efficient vehicles. Meanwhile the rest of the world modernized auto efficiency standards to meet the demands of an oil / energy constrained world. That meant once gas prices started rising (as most economists have been predicting they would for years now) GM and Ford were holding fleets centered around Hummers and other SUVs that weren't as efficient as similar models being made by other companies.

 

My family bought American made cars for generations, but when ever we've been in the market for new cars in recent years we've been looking closely at the MPGs. Unfortunately GM just hasn't been making the cut when those numbers are factored in.

 

GM has consistently lobbied against policies that would have helped them compete in a global market place. The enviros were willing to include development and research dollars with raising the CAFE standards but they blocked that and they helped block national health care plans that would have reduced the costs associated with current and retired labor forces.

 

I feel horrible for the families that have lost jobs. I know how devastating that can be. I just can't help but be slightly angry at the management of GM for guiding such an important and powerful industry spiraling down the tubes.

[SenatorShriv]

"Ten years? Try next year. Heck, we could cross six dollars by the end of this year, yet. I don't put it past our government to do nothing about the situation."

I don't trust our government to do anything about it either (and I'm not sure there is really all that much they CAN do) that's why when it came time to buy a new car I purchased the most fuel efficient car on the market that met my driving needs. Unfortunately that meant GM products weren't on the table.

[bork]

Some of the previous posts have me wondering: What exactly is an "American-made car". Chrysler isn't a US company anymore. And aren't Toyota's and Honda's built here in the US? So the Japanese carmakers are employing American workers. So what's the difference, beside the corporate parent not being in the US?

[Nottso]

Someone said "there are many 20/30 somethings that have never had a domestic car in the driveway" (or words to that effect). There are also plenty of 20/30 somethings that have never had a better job than working at Burger King or Walmart, nor are they ever likely to. That's a very sad reality. The opportunities available to previous generations just aren't there anymore. Most of the good paying manufacturing jobs that were once available are now gone. The few that remain will soon be gone, if we don't change our ways. Where are your kids going to work... ?

 

Please note: I'm not casting aspersions upon the work ethic of the aforementioned 20/30 somethings, I'm merely pointing out the ever dwindling job opportunities afforded them.

[owbc]

If global oil production hasn't peaked already, it will in the next 10 years. Many in the government completely ignore this fact, instead making astounding assumptions about new discoveries that do not exist and technological improvement that won't come. Some of these "experts" predict a peak as late as 2035. Simply, oil is being consumed faster than we can get it out of the ground, and it's only going to get worse...much worse. Although production tends to follow a bell curve, the increase in prices lately will result in a temporary surge in production, which will create more of a "plateau" instead of a smooth decline. When that happens, today's prices will look like a bargain and there will be no possible way to keep up with demand.

 

Right now, we should be trying to restructure our society be investing heavily in hybrids, cellulose ethanol, hydrogen, batteries public transportation, and just about anything else that would reduce our country's oil consumption. Instead, we ignore the problem and suggest things like ending the gas tax, which would help people ignore the fact that the oil crisis is just beginning.

[Invader3K]

Someone said "there are many 20/30 somethings that have never had a domestic car in the driveway" (or words to that effect). There are also plenty of 20/30 somethings that have never had a better job than working at Burger King or Walmart, nor are they ever likely to. That's a very sad reality. The opportunities available to previous generations just aren't there anymore. Most of the good paying manufacturing jobs that were once available are now gone. The few that remain will soon be gone, if we don't change our ways. Where are your kids going to work... ?

 

Please note: I'm not casting aspersions upon the work ethic of the aforementioned 20/30 somethings, I'm merely pointing out the ever dwindling job opportunities afforded them.

I disagree. If someone is working at a burger joint (and not as a manager) by the time they're in their mid 30s, it's due to choices they've made in their own life, or they're simply content to not work harder to get ahead. It's not GM's or the government's fault. Big corporations aren't obligated to give people amazing benefits and financial guarantees for menial labor. As far as my own kids, I don't have any yet, but if I do, I hope they'll aspire to do more than hope for a union guaranteed factory job. Not that there is anything wrong with unions or factory work, but they don't necessarily guarantee a good financial future, as the people at GM Janesville are seeing. I would hope my kids would be driven to get through college so they don't have to sweat in a factory.

 

We're moving away from a manufacturing and agriculture type economy to a service and information based economy in the United States. This is simply part of that trend. Basically what happened is that technology got cheaper while labor got more expensive. I guess I don't see the justification for someone without a college degree being able to walk into a factory without previous training and receive a high five figure income, with full benefits, in 2008. It just doesn't make financial sense anymore. However, new industries come in, and if a city like Janesville is smart, it will find ways to get workers trained for new jobs in new industries, and attract new companies to fill the void. It's easy to lament the passing of an era (which is sometimes view through rose colored glasses, IMHO), it's harder to actually do something to move forward into the 21st century.