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Higher Gas Prices Temporarily Close Janesville GM Plant

Drivers Slow Buying SUVs That Guzzle Gas

Posted: 6:37 pm CST March 20, 2005

Higher gas prices are taking their toll on more than just the public’s wallets.

A General Motors employee says they are partly responsible for the plant's latest shutdown.

So far, 2005 sales of GM’s large utility vehicles like the Yukon and Tahoe are down more than 30 percent according to industry experts.

That’s in line with the overall automotive market, which is down 26 percent.

Janesville GM employees began four weeks of unplanned vacation this week.

Rising gas prices are mostly to blame says GM’s shop chairman John Dohner.

"With fuel prices going up it's taking a bigger bite out of people's paychecks every week," said Dohner. "Now, they're starting to consider whether they need their sport utility vehicle or something that gets better gas mileage."

Dohner says GM isn't the only manufacturer dealing with this. Chrysler and Ford are also feeling the pinch, he said.

Studies by the automotive companies indicate any higher prices at the pump tend to be devastating, he said.

"If gas gets to $2.50 and $2.75 in that range, it will greatly affect the sales and lead to more inventory," said Dohner.

Dohner said that at that point, the picture gets a little scary because companies will look at plants where they have excess capacity, such as GM’s plant in Janesville, and they may consider closeing them.

A GM corporate spokesperson says that's not likely in this case.

Other Janesville residents tend to agree.

"Every year that I've worked here I've heard, ‘GM is going to leave’ but I've worked at this company for four years and I think they'll be back," said GM employee Jason Swenson.

Swenson said he and others just need to ride the storm out.

Much of the area's optimism comes from what's being called the 900 Project.

That is a new line of SUV's that will be built in Janesville after Jan. 1, 2006.

Dohner said he's confident the new design will boost sales.

"People are getting a little worried, a little nervous," said Debra Shadowski.

Shadowski has lived in Janesville for 10 years. "It's a lot of jobs in the area, housing and that type of stuff," she said.

Shadowski doesn’t work at the plant, but about five percent of the city does.

When something happens inside the factory walls it affects everyone in the community.

"It’s the economy," said Shadowski. "You notice it shopping, but the housing market is the biggest thing you notice it."

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