By Brian E. Clark
General Motors will cut one shift at the Janesville assembly plant in July and lay off about 750 employees – about 30 percent of its workforce – company officials announced.
Other Rock County companies that supply the GM plant could also be affected by the furloughs, with hundreds more layoffs possible.
Analysts said the move is a response to soaring fuel costs and slowing sales by the automaker.
The cutbacks by GM could mean the company will have to return some of the $10 million it received from the state in 2005 as part of a deal to keep the plant open.
Commerce Department spokesman Tony Hozeny said GM got $1 million from the Workforce Development Department, $1 million from the Focus on Engergy Program and $8 million from Commerce.
Hozeny said state officials only learned of the impending layoffs Monday afternoon. He said it was too early to say how much, if anything, GM would be required to return.
The plant currently builds 880 SUVs a day, with two 10-hour shifts producing 440 vehicles each.
Come July 14, one shift will build 580 vehilces a day.
In a letter to workers, plant manager Gary Malkus said the decision to idle one line was “very difficult” and “made to bring production capacity in line with market demand.
“I understand that this is a very metional and difficult announcement to make. I also want to recognize that the entire Janesville assembly team has worked diligently to improve health and safety performance, quality, reduce unnedessary costs and run the plant effectively.
“However, the combinations of a weak economy and rising gas prices have impacted the decision to eliminate a shift at our plant.
“Rest assured that this change is not a reflection on our great Janesville workforce, but is driven by significant reductions in the full-size SUV market demand related to current fuel prices and economic conditions.”
Steve Scheiffer, Janesville’s city manager, said he was “saddened and disappointed” by the layoff announcement.
“It’s difficult for a community to lose 750 jobs and we are very concerned about the individual workers,” he said.
But he said Janesville’s economy has diversified in the past two decades and is not as dependent on GM as it once was.
“I am optimistic that there will be opportunities for those who will be laid off to find work,” he said.