Janesville Page 7

  This morning, he said his goodbyes to each person in the small crew, aware that he has not been as close to them as to many who have left before. Now that it is the afternoon of his own last day, he doesn’t want to get stuck in any long conversations. So he takes the one look from the doorway and, after eighteen years at Lear, is gone.

   12

  Bidding War

  At 6 p.m. on June 11, Marv Wopat enters a large courtroom on the fourth floor of the Rock County Courthouse. His forty years at the assembly plant may have ended, but not his fighting spirit for the working man. Or, more precisely, for the men and women who were working until their jobs vanished and who are aching to be working again, two of his kids among them. He has been waiting for this night to make his big push.

  Tonight is one of the two Thursdays each month that the county’s Board of Supervisors convenes inside the courtroom. The supervisors sit toward the front of the room in two rows of seats divided by a center aisle. For the past fourteen months, Marv has squeezed his broad frame into a chair in the second row, two seats to the right of the aisle. He represents the town of Milton, just north of Janesville. For all the community work he has done—boards and commissions on top of listening to the private confidences of people with addictions screwing up their lives—this is the first time in his sixty-two years that Marv has held elective office.

  It is from this cramped seat that, tonight, Marv raises his hand and is recognized by the board’s leader on the courtroom’s dais. In his booming voice—so loud that, whenever he picks up his microphone, the county clerk knows to keep her hand on the audio system’s volume dial—Marv makes a motion to go into a closed, executive session.

  This late spring evening marks a full year since the plant-closing announcement. It is weeks shy of a year since Marv’s retirement. It is the first time the supervisors have met in the ten days since General Motors disclosed that Janesville is one of three U.S. assembly plants still in the running to manufacture a next-generation subcompact car, which the company is hoping will help reverse its fortunes. GM’s fortunes have just crashed to a once unimaginable low. At 8 a.m. the day before it disclosed that Janesville is a finalist, and despite $19.4 billion in loans that the U.S. Treasury has ended up pumping into the company, General Motors filed for bankruptcy in a Manhattan court. As part of its restructuring, the company said it will shed fourteen more U.S. plants and 21,000 more hourly wage jobs. The government is providing another $30 million in loans. Rick Wagoner is not around to deliver the latest grim news; he was pushed out of the CEO’s job in March.

  Amid these ashes, Marv sees opportunity. In response to his motion, the doors are closed and the supervisors and a few managers are now the only ones in the courtroom. The agenda item is how much money the county will contribute to the final economic incentive package that Wisconsin is about to present to General Motors. Most of the supervisors believe that $5 million is plenty. The county, they say, can’t afford more with its tax base hemorrhaging in this awful economy.

  Marv is his blunt self. “We need to put in the best offer,” he says in his booming voice. “If we don’t, other places will outbid us.”

  Neither Marv nor anyone else fighting to reopen the assembly plant knows how much money is being offered by the two competing communities whose plants are also in the running—Spring Hill, Tennessee, and Orion Township, Michigan. Yet Marv can see that he is not the only person in Janesville who recognizes that an all-out effort is needed to prevail in a bidding war to reincarnate an auto plant with its lights out.

  The city’s two medical systems, Mercy and Dean, have pledged to provide discounts on workers’ health insurance premiums if General Motors returns. Alliant Energy has promised to lower the assembly plant’s electric bills. Some local businesses have even banded together and agreed to pay whatever it takes to buy Zachow’s Tavern. To General Motors’ consternation, Zachow’s has been sitting for decades on a sliver of property that the tavern owned before the plant’s parking lot expanded around it. If the plant reopens, the business owners are planning to convert the tavern into a day care center for the kids of working-again GM’ers.

  With everyone else pitching in, Marv thunders, Rock County must not do its part on the cheap. Besides he has done a little math: Think about the payroll from one day of overtime when the plant was busy—time and a half to all the GM’ers and the Lear folks and the people who loaded and unloaded the freight trains bringing in supplies and carrying away Janesville-made vehicles. And then think about the tax revenue from all those workers’ pay. It adds up to $5 million in no time at all.

  This is Marv’s argument. This, plus the fact that, if the plant stays closed and people stay out of work, “there isn’t going to be any more money spent in Rock County.” A worrisome prospect, indeed, for supervisors who have been elected by the citizens to set the county’s budget.

  By the time Marv finishes and the votes are tallied and someone opens the courtroom door for the public to come back in, the supervisors have agreed to offer General Motors what Marv wanted: $20 million.

  This is not a fact that the public will know right away. Still, Marv is relieved. He has accomplished what he came to do tonight. He believes that $20 million—a fortune for a hurting county—will be enough to make a difference.

   13

  Sonic Speed

  When U.S. automakers decide where to manufacture new products, they have come to expect that the states and communities they are considering will present enormous dowries in the form of tax breaks and other financial gifts. So, a few days after the Rock County supervisors quadrupled their offering to General Motors, Wisconsin sends off to the company its final economic incentive package to try to land the new small car for Janesville’s assembly plant. The package adds up to $195 million: $115 million in state tax credits and energy-efficiency grants, the $20 million that Marv Wopat pushed through the county board, $15 million from the strapped Janesville city government, and $2 million from Beloit, plus private industry incentives, including from the businesses willing to buy out the tavern in the assembly plant’s parking lot. And that isn’t counting concessions worth $213 million that UAW Local 95 is willing to sacrifice in exchange for retrieving jobs.

  The biggest incentive package in Wisconsin history.

  The competition is still down to the three finalists—the factories in Tennessee and Michigan, along with Janesville. GM executives have said they are considering a dozen factors in evaluating which one deserves the little car and the jobs that come with it. The amount of money each finalist has proffered for the privilege is only one factor. Yet the unmistakable fact is that money counts for a company in bankruptcy court.

  In the end, Janesville never had a chance.

  At 7 a.m. on June 26, Governor Doyle receives a phone call. On the other end is Tim Lee, the vice president for manufacturing of GM North America. Seventeen months ago, the day of Obama’s hope-drenched campaign speech at the assembly plant, Lee was in the front row, two seats to the right of the governor. When Obama predicted that the plant would last another hundred years, Lee stood in ovation with all the rest.

  This morning, Lee’s news for the governor is grim. General Motors is giving its new small car to Orion Township, Michigan.

  It is crushing news for Janesville. During the Great Depression, the assembly plant had reopened after a year. During the crisis of 1986, medium-duty trucks soon replaced the pickups that vanished from the assembly line. It is hard to fathom that the plant-rescue mission hasn’t rescued the plant once again.

  In defeat, the governor sounds bitter. All along, Doyle says, General Motors wanted to give its new little car to the Orion plant. The company had merely used Wisconsin’s offer as leverage to wring even more from Michigan, he says. “I do not believe that Michigan matched us.”

  Each finalist’s gambit in the bidding war was a secret until now. And the governor, it turns out, is wrong. Wisconsin’s offer may have been historic. But Michigan offered ne
arly five times as much.

  Home to the U.S. auto industry and a 15 percent unemployment rate that is the nation’s highest, Michigan has a governor who has been desperate to get the new car for the Orion Assembly Plant. Of more than a dozen factories that General Motors intends to close as part of its plan to climb out of bankruptcy, half are in Michigan. Orion, about forty miles north of Detroit, is one of them. Winning the bidding war would salvage 1,400 jobs for Orion and a nearby GM plant that stamps out parts from sheet metal. “We would do everything possible to get that production in Michigan,” Governor Jennifer Granholm told GM executives right after the company declared bankruptcy.

  Everything possible included setting up a war room inside the headquarters of the Michigan Economic Development Corporation in the state capital of Lansing and within a mere few weeks devising a strategy to offer General Motors the amazing sum of $779 million worth of tax breaks over the next twenty years and $135 million in job-training funds, plus water and sewer credits from Orion Township and money from a fund to help companies find good workers. In all, more than $1 billion in public money. The largest inducement Michigan had ever offered a corporation. Enough to win a small car.

  Michigan’s bid on behalf of Orion isn’t the only stratospheric offer lately that has landed an automotive prize. When General Motors decided last year to build a Chevy compact, the Cruze, at its assembly plant in Lordstown, Ohio, that state gave GM $220 million in incentives. After the Ford Motor Company decided last year to spend $75 million to renovate a truck plant in Wayne, Michigan, in order to manufacture a compact model, the Ford Focus, the state of Michigan agreed to give Ford $387 million in tax credits and rebates. And when Volkswagen last year decided to build a plant in Chattanooga, Tennessee, to manufacture a sedan, the Passat, that company received $554 million in state and local tax breaks.

  All were more than Wisconsin offered General Motors to try to get the lights back on at Janesville. Even in this high-stakes, high-priced environment, Michigan’s play in the bidding war is a record-breaker.

  In their defeat, the governor of Wisconsin and the people of Janesville were not in position to see that winning also would have had a cost. But as time went on, it turned out the price of victory went beyond Michigan’s enormous public investment. The price was steep for Orion’s workers, too.

  GM named its new small car model the Sonic. It became the only subcompact car being made within the United State—the first subcompact, in fact, that General Motors had made domestically since the 1980s. Originally, it was to have been manufactured in China, but GM had rethought that decision as part of its strategy to reposition itself for consumers in a feeble economy. The company had decided to make the inexpensive little car in the U.S., even though many of its parts would still be made in South Korea, as GM’s previous smallest car, the Aveo, had been. This decision carried with it a large question: How to make a profit while paying union wages?

  General Motors had anticipated this question, and a few years earlier it persuaded the United Auto Workers to accept a big concession in a national labor contract: a two-tier wage system that allowed the company to hire new employees at about $14 an hour—half the standard $28-an-hour wage. Under the contract, as many as one fourth of GM workers across the company could be paid this lower wage.

  Then, while the Orion assembly plant was shut down to be reconfigured, the UAW local there bent further than the national contract had envisioned. Worried that GM might take away the plant-preserving, job-sparing little car, the local agreed to extra wage cuts: When the plant reopened to make Sonics, two of every five workers, including some existing GM employees, would be paid half as much as men and women next to them on the assembly line. The new president by then of General Motors North America called the arrangement “very radical” and said it would “test our ability to be really competitive here.” A leader of the Orion UAW local said it was “better than having the doors closed and wondering where your next paycheck is coming from.”

  While waiting for the plant to reopen, the company gave hundreds of Orion’s laid-off workers with more recent anniversary dates a terrible choice—an option to transfer to GM’s Lordstown plant, 250 miles away. If they transferred, they’d be guaranteed the regular $28 an hour. If they remained in Orion until the plant reopened for the Sonic, they’d gamble on whether their seniority would end up protecting their wages or slicing them in half.

  Scores of Orion workers picketed Solidarity House, the UAW International’s headquarters in Detroit. “Call a cop, I’ve been robbed,” said the placard that one carried. Another filed a complaint with the National Labor Relations Board—not against General Motors, but against his own UAW local for having accepted the concession without checking with its members. The NLRB dismissed the complaint.

  So at 6 a.m. on August 1, 2011, when production of the Sonic began, 40 percent of the workers were paid $14 an hour. Many parts were shipped from South Korea. The engines came from Mexico. And in another innovation, some parts suppliers began working right inside the Orion plant. Their average wage: $10 an hour.

  This was the price of victory.

  The high price of victory is off in the future. On the bad-news day at the start of summer, the people of Janesville are reeling, the failed crusade to reopen the assembly plant so contrary to the community’s long, proud tradition of comebacks.

  Paul Ryan issues a joint statement with three Democrats in Wisconsin’s congressional delegation. Among them is Senator Russ Feingold, who grew up in Janesville, too, and whose grandfather had, in 1923, bought the first Chevrolet truck that ever came off the assembly line. “It is because of the hard work, determination and coordination by all involved that the Janesville plant made it this far and was in the running until this point,” Paul and the Democrats say. “We are committed to helping the working people of Rock County . . . and we will continue to work together, with the Governor and with others, to do all we can.”

  Their statement typifies the unified front that has lasted through the hard-fought, losing struggle. And yet, before this day ends, an ideological crevice surfaces—small at first, but over time it will deepen. The crevice goes to the core of the question that confronts Janesville now: What should happen next?

  Paul believes it is pointless to wait around for General Motors to come back. It is time, he says, for Janesville to find a way to buy from General Motors the silent behemoth of a factory along the river and use it for other purposes. “We need to move on,” he says.

  With these words, Paul is reflecting the view of local business leaders. It is the view of Forward Janesville and Mary Willmer, who during the past few months has quietly been raising money toward the $1 million goal of Rock County 5.0—the economic development campaign, which has not yet been revealed to the community as a whole.

  But to many out-of-a-job workers, this view is heresy. “Move on” sounds like an insult. They hear “move on” as a betrayal of Janesville’s past and a cruel disregard for a thin silver lining on which, dispirited as they are, they are beginning to focus. The silver lining is this: When it chose Orion, General Motors could have closed Janesville’s assembly plant permanently. It did not. It has left the plant in a status known as “standby”—inert but available in case GM’s business recovers enough that it is needed again. In the limbo of standby, Janesville’s workers find a residue of hope.

   14

  What Does a Union Man Do?

  August 24 is coming up soon. The first day of classes. And Mike Vaughn knows he can’t put it off much longer. He couldn’t remember the last time he’d kept a secret from his dad, let alone a whopper like this one. But on these hot days of a Wisconsin summer, every time he imagined telling his father, he couldn’t get past the disappointment that might cross his face, the very real possibility that his father, who’d always stood behind him, might not be able to stand behind him now. So Mike has waited a few more days and a few more days, until time is running out.

  How do you t
ell your father that you’re going to the other side?

  The shadow of the three generations of Vaughn union history, his own included, keeps stopping him. He knows the family lore. It is his lore. It goes back to the lead mines that, in the old days, were scattered through Wisconsin’s southwest corner in places with names like New Diggings and Swindler’s Ridge, and the McCabe Mine in which his great-grandfather was killed. Mike’s grandfather Tom tried to start a union in a mine before he came to Janesville for a GM job in the “See the USA in Your Chevrolet” 1950s, doubling his wages from $1 an hour to $2. Having wanted to be a union man all along, his grandfather talked wages and working conditions with the other UAW guys after their shifts at a gas station out on Milton Avenue. He gained their confidence to be elected a zone committeeman representing one thousand GM’ers. Years later, he helped to plan the Walter P. Reuther Memorial Hall where Local 95’s offices still stand today.

  Mike’s father, Dave, grew up in Janesville and was still a teenager when he was hired into the assembly plant in 1967 as a spot welder. He’d been on the assembly line for just three years when a strike over raises and pensions broke out. His father was still at the plant, on the union bargaining committee, so that they struck General Motors together for eleven weeks. Dave became a Local 95 vice president a couple of years after Mike got hired at Lear so that they, too, overlapped in the local. Dave loves the union so much that now, with the assembly plant closed and no workers left to run the local on release time, as they always had, he and a buddy, Mike Marcks, have stepped out of retirement to reprise their old gigs as its vice president and president. This time, as volunteers.

  The Vaughns are one of only two families in town who have had three generations on the Local 95 executive committee. Mike’s turn lasted eleven years before it was over. He helped to resolve routine pay squabbles and larger disputes over workers’ comp and the Family and Medical Leave Act. For a time, he was even on a committee for the UAW International, sizing up the merits of grievances that had arisen at other parts suppliers. Union pride runs as deep in him as in the generations before. But the truth is that his father had been retired for five years and his grandfather buried for a year by the time his wife, Barb, lost her job and his own was ending soon.