Channel3000.comAutomotive

GM Layoffs Could Endanger Multimillion-Dollar State Grant

Commerce Department, GM Officials To Discuss Plant Changes

UPDATED: 7:58 am CDT May 7, 2008

General Motors' financial concerns forced layoffs at its Janesville plant, but the move could end up costing the company in the end.

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State grant money was given to the auto manufacturer in 2005, but it came with specific conditions.

At stake is a $10-million, multi-agency grant awarded to GM by the state -- specifically more than $8 million from the Department of Commerce for job training, WISC-TV reported.

Both GM and Department of Commerce officials said that the grant initially required the production facility to maintain at least 3,300 jobs through 2008 and 2010.

With decline sales of the full-size SUVs like the kind being built at the Janesville plant, GM announced last month that more than 750 workers will be laid off. This puts the plant's work force at less than half of what is required for the grant.

The first contract runs through the end of the year. Until then, there are no violations, officials said.

Tony Hozeny, who works in the secretary's office at the Department of Commerce, said that officials plan to follow up with GM.

"We'll be meeting with the company. We'll be talking with the company about various things and again, I want to stress, no penalties are being invoked now. There are no penalties due now. These contract periods have not expired yet," he said.

The majority of the grant has already been used up.

Commerce officials said that they might be able to restructure the grant to assist GM, saying the department's goal is to keep jobs and industry here in the state.

GM officials said that the contract includes a repayment option in the event that jobs aren't maintained.

At this point, however, both sides are planning to discuss where they're at now and how to continue moving forward.



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