WisBusiness: GM could owe state up to $8 million

By Greg Bump

About $8 million in grants the state gave to General Motors to boost worker training at its Janesville plant were tied to employment numbers the corporation has failed to maintain, which could give the state an opening to recoup the money, according to documents the state released through an open records request.

The Department of Commerce documents detail a $5.4 million grant package that requires the plant to stay at or above 3,300 hourly and salaried employees through Dec. 31, 2010. The automaker announced it will close the Janesville plant by 2010.

Published reports have pegged the plant’s employment at about 2,500 employees, though some sources have suggested it is significantly lower. A GM spokesman did not return calls seeking comment today.

Another grant worth $2.6 million that runs through the end of this year has similar criteria. The grants were provided to help the automaker with a planned $175 million overhaul to the plant and for worker training.

When the plant closure was announced in early June, Gov. Jim Doyle said he would look into whether the state could recoup some of the grant cash. Doyle spokesman Lee Sensenbrenner said today that the administration is “looking at taking back some of the money based on what’s in the contract, but it’s still too early to know what the amount could be.”

The contract lists some “market conditions” under which the company could fail to comply without defaulting on the contract. The market conditions include two consecutive quarters of decline in manufacturing employment in the state.

The contract lays out penalties for not meeting employment criteria, ranging from $1,600 per position not maintained at the end of 2003, down to $300 per position by the end of 2010.

In all, the state handed GM $10 million in four separate grants since 2004. Two $1 million grants from the Department of Administration and the Department of Workforce Development do not contain requirements tying the grant money to employment levels.

*See the documents released by Commerce:
http://www.wispolitics.com/1006/080721_Commerce_GM3.pdf (Contract for $5.4 million grant begins p. 87)
http://www.wispolitics.com/1006/080721_Commerce_GM2.pdf (Contract for $2.6 million grant begins p. 4)
*Other documents: