Wednesday, June 4, 2008

Closing GM's Janesville Plant - Why should we care?

As we all know, GM has announced that Janesville's manufacturing plant will be closed in 2010, thanks to the runup in fuel prices and demand destruction for the guzzling SUVs made by it. Before we gloat and say "I told you so, you should have known it was coming" about GM's short sighted business decisions, we should look at the implications of this closing. Janesville has been kept afloat with a viable middle class with good paying union jobs thanks to the presence of this facility, and it's shuttering, accompanied by the loss of the good jobs, will initiate a death spiral for the city, if something is not done to mitigate it. And, I think some of our county's denizens probably work at GM or one of it's suppliers in Janesville, thanks to our cheap-labor based local economy. Unlike us here in Walworth County, Janesville does not even have a tourism base to attract people to it, so even those cheap-labor jobs will be foreclosed to it.

Lets look at an alternative scenario. The GM plant is centrally located, and served by two rail lines, which both cut through Walworth County. One is the Wisconsin and Southern, which goes through Darien and Walworth on its way to Fox Lake, IL and Chicago. The other is the Union Pacific, which follows a route from Janesville through Sharon, WI on its way to Harvard, IL and Chicago. These lines are being kept afloat partially by the vehicle and parts shipments to and from Janesville, and the loss of this business will hurt the railroads and potentially lead to abandonment of these lines as non-profitable. In a future of peak oil, maintaining and improving these rail lines will be essential to the livelihood of our county and region, and potentially the only way it will be economically viable to obtain goods from elsewhere as fuel costs become prohibitive for the current trucking-based distribution network.

We could save both the jobs and maintain the infrastructure vital to our future by retooling and re-using the Janesville GM plant to provide manufacture and servicing capability for passenger and freight rail locomotives and rolling stock. The existing location with extensive rail connections provides an ideal location for such a facility, and would provide net benefits to both Janesville and the region as a whole, including Walworth County. The unions could be put to work making trains as part of our complement of silver BB's to cope with oil depletion. The ancillary manufacturing facilities, such as Lear, that now make seats for GM SUVs could instead make seats for passenger rail coaches.

There is no reason, other than status quo inertia and inability of the powers that be to think outside of the box, why we cannot promote and implement such a long term solution. We have ceded manufacture of rail equipment to the Europeans, Japanese and Chinese; perhaps we need to look at doing something here to recapture American know-how. The Wisconsin state government provided incentive packages for GM to stay and retool the plant, and now they are looking to claw back
the incentive monies
from GM. Perhaps the state could use these monies, if they can get them back, as seed money to get the ball rolling, or to get the trains on track, so to speak.