Economic effects caused by the departure of Chrysler from Kenosha, Wisconsin, and
General Motors from Flint, Michigan, and Janesville, Wisconsin
By
Jason Taylor
An Undergraduate Thesis
Submitted in Partial Fulfillment for the Requirements of
Bachelor of Arts
in
Geography and Earth Science
Carthage College
Kenosha, WI
May 17, 2011
Economic effects caused by the departure of Chrysler from Kenosha, Wisconsin, and
General Motors from Flint, Michigan, and Janesville, Wisconsin
Jason Taylor
Abstract
General Motors has a long history in both Janesville, Wisconsin, and Flint,
Michigan. Chrysler also has a long history in Kenosha, Wisconsin. These corporations
brought large economic growth to these cities, and after their departure they left a major
economic void. In 2010 unemployment in Flint is approximately 13%, in Kenosha
11.1%, and in Janesville approximately 13%. Each of these cities have made steps
towards redevelopment. Kenosha has been more successful because of its location
between Milwaukee and Chicago, and being on Lake Michigan. They have turned the
old plant site into an example of urban development by building condominiums,
museums, and a marina. Flint has had a long recovery process starting in 1988 and is
still trying to find a solution. They have made many attempts including revitalizing the
downtown area to increase tourism, and more recently have started to downsize the
city. Janesville has just recently lost General Motors (GM) and is still searching for a
way to cope. These effects go beyond the economic level and initial job loss. There is
broad secondary job loss. As well, the closing of these plants takes a heavy toll on the
communities. For example, in Janesville former GM employees are faced with the
decision to either go back to school for a new trade, move their whole families, or even
commute cross country to other GM plants, which places a lot of stress on family
relations. These automotive plants have a large impact on their communities once they
pull out, and the recovery process is often decades long.
1
Table of Contents
List of Figures
3
List of Tables
3
List of Photos
3
List of Graphs
3
Introduction
4
Background
4
Flint, Michigan
6
Kenosha
10
Janesville
11
Methodology
16
Results
16
Flint
18
Kenosha
24
Janesville
27
Discussion and Conclusions
34
References
38
2
List of Figures
Figure 1A, Flint Michigan General Motors Aerial photo
9
Figure 2A, Janesville General Motors Aerial photo
14
Figure 3A, Kenosha Harbor side park Aerial photo
26
Figure 4B, Unemployment by County Group 2010
20
Figure 5B, Genesee County Unemployment by
Block Group 2010
21
Figure 6B, Kenosha Unemployment by
Block Group 2010
29
Figure 7B, Rock County Unemployment by
Block Group
34
List of Tables
Table 1, Unemployment Rate for Select Wisconsin Cities
33
List of Photos
Photo 1, No Foreign Vehicles
8
Photo 2, The Janesville Assembly Plant
15
Photo 3, Kenosha/Chrysler Plant
25
List of Graphs
Graph 1, Unemployment Rate: Flint, Michigan, National
19
Graph 2, Kenosha Unemployment Rate
25
Graph 3, Janesville, Wisconsin Unemployment
33
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Introduction
Living in a community that has grown around the existence of one major industry
such as General Motors is like “putting all of your eggs in one basket.” Diversity in
investment is a good thing, and relying on just one can have devastating effects when it
disappears. This is occurring in many communities that have been home to General
Motors (GM) plants. The purpose of this thesis is to explore the broad economic effects
that follow the loss of a major manufacturer such as General Motors in Janesville,
Wisconsin, within communities and for individuals. These effects include primary job
loss and its secondary job loss, and public cost. Public cost includes redevelopment
issues, schools, roads and other public infrastructure. The bankruptcy of General
Motors is not just a corporate one, but a human one.
With this research it will be shown that General Motors leaving Janesville has
had a major impact on its economy. This body of research will extend and revise the
public knowledge of the closure of General Motors in Janesville. Comparisons will be
made between Kenosha, Wisconsin, and Flint, Michigan.
Background
These communities are now faced with economic devastation from which it could
take years to rebound. Losing an automotive plant is just the beginning of a snowballing
effect. In Janesville, Wisconsin, the loss of GM was just the first step. Quickly following
the announced closure of the plant other companies affiliated with GM, such as Lear
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Corporation and JATCO started to announce closings (Janesville Gazette Staff, 2008).
Other businesses that relied on GM employees have had to lay off their employees or
close their doors. High unemployment and lack of other work is forcing these displaced
workers to look for employment elsewhere. This in return causes real estate prices to
drop due to large numbers of people leaving and high foreclosures. (Dupree, 1973)
Retail outlets, day cares, restaurants, medical facilities, banks, and hosts of other
businesses are feeling the losses as well. This scenario is being repeated in many
communities throughout the country.
The effects continue to mount. As of July 2009, the General Motors Fairfax plant
in Kansas City, Kansas, has offered 170 positions to senior workers from the former
Janesville plant. The program has been set up to provide jobs for laid-off GM workers
around the country. While this is good news for the select few chosen workers, this
does not solve the greater problem for the whole community. In fact, it is possible that
this will take a couple hundred people out of the Janesville area and out of the tax base,
which in turn may have effects on all government services. With the departure of these
workers, this would also mean a number of houses would go on the market. If the
houses do go on the market, the chances of sale are unlikely because of high
unemployment and no employment opportunities in the area (Leute, 2009).
Rebounding can take years. These communities are now faced with finding ways
to bring other industry and jobs into their towns. City and town officials are putting
together bids and plans on how to attract new industry and businesses (Janesville
Gazette Staff, 2008). Without these they will continue to see a decrease in human
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population. The bottom line is that many of these communities will never be like they
were with the presence of General Motors and other automotive industries.
Before analyzing the effects the closing of these plants has had, an in-depth look
at the history of automotive companies in these three cities will be taken.
Flint, Michigan
The Flint Michigan plant was opened on September 11, 1903, under a successful
business man Billy Durant. Durant ran what was then a Buick plant under the worst
conditions he could find in the Flint area because he was skeptical of the “horseless
carriage.” Later convinced that the Buick was a superior car, Durant turned his attention
to building automobiles.
Buick soon became the nation’s most popular vehicle. Durant established a
record unmatched by any individual in the history of the automotive industry. Durant
introduced two key concepts that define manufacturing today, customer choice and
industry consolidation. In 1908 he founded the General Motors Company, by combining
Buick with an assortment of manufacturers and suppliers (Jaeger).
The 1930’s witnessed the rise of the United Auto Workers. On the morning of
December 30, 1936, workers camped inside GM factories in the nation’s largest “sitdown-strike.” It lasted 44 days and brought GM production to a virtual halt (Jaeger).
During World War II, Flint also began arming the nation. Along with other
automotive factories they turned out ship instruments, tanks, shells, shot and machine
guns. Most noticeably they produced the Hellcat, a fast-moving tank destroyer (Jaeger).
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Flint boomed in the 1950’s. In 1957, General Motors marked the production of its
50 millionth vehicle. But over time the unpredictable industry fell to foreign competition,
lower business costs elsewhere, and the North-American Free Trade Agreement
drained many of the jobs from the area. GM’s employment dropped from 82,000 in 1970
to 14,500 today (Jaeger).
Harlow Curtice was the last General Motors President to live in the City of Flint.
The manufacturing of cars in Flint stopped in 1998 when Buick City was closed. General
Motors trucks continued to be produced in Flint along with engines and other auto parts
until the Powertrain Flint North plant closed in December 2010 (Roberts, 1999; Burden,
2009)
What was once good for General Motors now had become what was bad for
America. Over the years, Flint became the quintessential company town. The majority
of people worked for GM. Their homes were built by GM construction companies, and
GM held the mortgage. People bought their cars from GM and they held the lien on that
too. GM took care of their every need. Then GM discovered that they could make
cheaper cars in the non-union south. In the 1990’s developing countries became an
even better option, and this led to feelings of resentment for GM employees towards
foreign-made cars (Photo 1). What GM left behind was thousands of displaced workers,
many who left. Much of the downtown has been demolished or boarded up and many of
the remaining residents line up weekly for government surplus supplies. The plant sits
vacant and in disrepair along with many neighborhoods surrounding the area. (Figure
7
1A) In 1987 Flint was named the second worst city in America to live in. (Moore, 1987
753)
Photo 1, No Foreign Vehicles (Jason Taylor)
When the General Motors Plant in Flint shut down approximately thirty thousand
workers lost their jobs. More than half of Flint’s residents became unemployed. Flint
became the most poverty stricken city in the United States. In 1960 there were
approximately 28 spinoff operations in Flint that were affiliated with the automotive
industry. Of the 80,000 workers in Flint during General Motors peak years in the 1970’s,
only about 8,000 remained as of 2006. Many residents have moved to Wyoming to seek
employment in the booming coal, oil, and gas industry. (“Flint, Michigan”)
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Kenosha
Kenosha’s Chrysler automobile industry was much like Janesville’s. It began in
1902 with Nash Motors, and grew into the world’s largest truck manufacturer by 1918.
Nash joined with Kelvinator, an appliance producer, in 1936, creating Nash-Kelvinator.
That company built cars until World War II, when it switched to producing combat
aircraft engines and propellers. When the war ended, car production resumed. In 1954
the company merged with Hudson, creating American Motors Corp (AMC). AMC
employment peaked at 17,000 in the 1960’s. But by 1974 the numbers fell below 13,000
and steadily declined after that. Faced with financial problems they merged with
Renault, a French auto maker in 1979. Renault sold to Chrysler in 1987 (Content,
2009).
The new owners felt that the Kenosha plant was inefficient and the company had
other car production plans. In January of 1988 the closure of the Chrysler plant was
announced. The last car was built in Kenosha, an Omni/Horizon, on Dec. 21, 1988.
Some 11 million cars had come out of the Kenosha’s car factory by then. The
abandoned Chrysler plant was torn down by 1990 (Content, 2009).
Kenosha’s relationship with its carmakers from AMC’s beginnings through the
Chrysler purchase has been stormy. Always there was the hope that somehow the
small US auto market could make and market a car line distinctive enough to compete
against the Big Three of Chrysler, Ford and General Motors. (Sussman, 1988)
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On Friday October 22, 2010 the last engine scheduled for production at the
Chrysler plant in Kenosha rolled off the assembly line. This left behind the same
unanswered questions for this plant and its future. Like other cities facing the loss of
these plants, taxpayers could be confronted with the cost to environmentally clean up
the facility before it could be reused. Current plans for the site are to continue to market
the facility for a few years. If this doesn’t work then the site could be cleaned up and
turned into a green space. For the remaining 500 employees this means retiring or
relocating to other plants in Illinois and Michigan. It’s another sign of the end of an era
for Wisconsin. (Taschler and Barrett, 2010)
Janesville
In 1918 Joseph A. Craig brought GM’s Samson Tractor to Janesville, Wisconsin
and merged it with Janesville Machine Co., a maker of farm implements and employer
of 300 workers. Its first Model M tractor was produced on May 1, 1919 in a one story
factory. In just 18 months Janesville’s population grew from 14,000 to 20,000 as people
moved in to work in the tractor factory. The tractor factory employed 3,000 people by
1919. Since its beginning GM in Janesville brought a boom to the city (Janesville
Gazette Staff, 2008).
In 1921 tractor production in Janesville slowed almost to a halt because of the
national farm depression. It was shortly after this that Chevrolet announced its plans to
purchase the plant and add a Fisher Body plant. Janesville’s first Chevy was produced
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on April 1, 1926, with a daily quota of 380 cars a day or 10,000 a month. Just four
months later, the local plant produced its 500,000 car (Janesville Gazette Staff, 2008).
The great depression hit Rock County in the early 1930s, causing frequent shut
downs and layoffs. During this time the union movement was resurrected and
Janesville’s autoworkers played a key role in forcing GM to recognize the United Auto
Workers. By 1934 GM began to rebound with a work force of nearly 3,000 (Janesville
Gazette Staff, 2008).
In the 1940’s the production lines in Janesville joined the rest of the United
States in its World War II effort. It began producing approximately 16 million artillery
shells in three years. In August 1945 all military contracts were canceled and GM plants
returned to Chevrolet and Fisher Body Control (Janesville Gazette Staff, 2008).
In the 1950’s, due to GM, Janesville experienced tremendous growth in
business, housing, population and its general sense of community. GM’s Fisher Body
added a second shift and the Chevrolet division followed shortly. A year later, the Chevy
plant produced its 3 millionth vehicle and its workforce reached the 4,000 mark. By 1955
the workforce had swelled to 4,900(Janesville Gazette Staff, 2008). The 1950’s showed
many ups and downs for the local plant, but by 1968 it had several milestones. Hourly
and salaried employment increased from 5,700 to nearly 7,000. They also turned over
their 100 millionth vehicle (Dupree, 1973).
The 1970’s and 1980’s again had their ups and downs with several periods of
layoffs. In the eighties, a lack of interest in large gas guzzling cars forced GM to change
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their line to smaller, more fuel-efficient, front-wheel-drive J-cars. In 1984 GM moved its
truck line to Fort Wayne, Indiana. Local and state officials scrambled to get the truck line
back. In 1989 a small line of medium duty trucks was produced at the Janesville plant.
By the end of the 1980’s GM in Janesville ended up with 1,400 fewer jobs and were
looking at how to have a better chance for long term survival (Janesville Gazette Staff,
2008).
GM steamrolled through the 1990’s thanks to the groundwork laid in the 1980’s.
With the production of the Suburban, Chevy Blazer, GMC Jimmy, and hot selling SUVs,
which were back ordered up to six months, the local plant continued to succeed. As the
nineties ended, the Janesville plant was assured many years of work - at least through
2005, on the SUV line (Janesville Gazette Staff, 2008).
In 2000 the outlook was still positive for the plant, but rumors were beginning to
surface about its future. Janesville dodged GM’s reduction in November 2005, but poor
sales of big trucks continued to plague the plant. But the end was near, and on
December 23rd, 2008, the Janesville plant ended production forever. The now empty
G.M. plant sits vacant and awaiting it’s unknown future (Photo 2; Figure 2A) All
arbitration efforts and state and local government efforts couldn’t stave off the closure
and the bankruptcy of General Motors (Janesville Gazette Staff, 2008).
The effects of the closing of General Motors on December 23, 2008, were no
surprise to many in the community, including John Resch, a retired General Motors
worker, who visited Flint, Michigan, in the late eighties. He noticed the devastation of
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Photo 2: The Janesville Assembly Plant (Jason Taylor)
the entire community with “block after block after block, businesses completely shut
down” (Vogel and Ames, 2008 14A). Knowing how this affected Flint, it did not seem to
bode well for Janesville. While all of the General Motors plant closings were different,
they were similar in how they can devastate a whole community.
With General Motors recently filing for bankruptcy, the Federal government in
early summer 2009 took ownership of the plant and decided to re-open one of the
plants. Janesville and the plants in Spring Hill, Tennessee, and Orion, Michigan, were
the top three choices for a new small-car plant. While this could bring hope to shattered
communities, it may be unwise to rely on this kind of hope. It is possible that moving on
to other reconstruction acts would be better than waiting for something that may never
come.
15
Beyond the local level, General Motors’ bankruptcy and the closure of its plants
has started to affect buyers’ choices and questions as they shop for cars. Consumers
are a little more cautious about buying GM vehicles with news of the company’s
bankruptcy. While these extra worries may be unwarranted, they still have an effect on
the economy on the local and national level (Associated Press, 2009).
Methodology
Through the program Business Analyst unemployment data was extracted. With
this data set, the effects General Motors has had in Flint Michigan, Janesville
Wisconsin, and Chrysler in Kenosha Wisconsin, can be shown.
The use of Arc map GIS will map this data. Further research was obtained
through the use of outside sources such as internet resources, books, historical
documents from the Janesville Public Library, newspaper articles, scholarly articles, and
film documentaries. Excel was used to plot a unemployment graph for Kenosha,
Wisconsin.
Results
Although these three areas will not become ghost towns it will take a great deal
of time to rebuild hard hit local economies. Displaced workers who were not lucky
enough to transfer to another plant face lengthy unemployment and re-education costs.
Many displaced workers have chosen to move on with their lives and not take a passive
attitude about their future.
16
Finding uses for abandoned auto plants is another major problem communities
face. Of the 128 manufacturing plants in North America closed since 1980 by the Detroit
Three automakers and their largest suppliers, three of every five are still idle. At their
peak of economic activity hundreds of thousands of people, mostly well-paid union
members on the assembly line and white-collar engineers in offices above the factory
floor were employed. These 128 plants had a payroll of 196,000 workers. Today only
36,500 people work at those sites that have been redeveloped, and at only three of the
revived plants does the number of employees match or exceed the number in their car
making past. The rest are concrete prairies or steel monstrosities waiting for reuse or a
wrecking ball. Most haven’t any real prospects for re-use in the future. The cost of these
vacant factories will be carried over to the next generation and beyond. (Janesville
Gazette Staff, 2010)
In the past when a factory closed many workers just moved to a new plant
nearby. But today with the sharp cutbacks in the auto industry these jobs will never
return. These are permanent closures that aren’t going to be replaced. Two decades
ago General Motors employed as many as 20,000 workers inside a two-mile radius
around the Detroit suburb of Pontiac. In the fall of 2009, of a plant that made Chevrolet
Silverado and GMC Sierra trucks closed, the last of those jobs vanished. This causes
very little real estate interest, and makes re-development difficult. The loss to
surrounding businesses could be as high as 50%. For example, the owner of a bar
across from the closed Pontiac plant lost 60% of his sales from the previous three
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years. The owner holds little hope of any new business bringing him back to where he
was. (Janesville Gazette Staff, 2010)
The cost of re-developing these factories is huge. It would take a large
investment to get them back into productive use. The obstacles are many: a large
number of these plants are far from urban centers, and nearly all have paint, waste,
heavy metals or other hazardous materials on site. Many of these exceed regulatory
limits and cleaning up those toxins can cost as much as $300,000 an acre and take
years.
Flint
For Flint the recovery process has been slow and painful. Many proposals have
over the years helped slow the decline but none have helped to speed up the recovery.
Instead of waiting for houses to become abandoned and then pulling them down, local
leaders are talking about demolishing entire blocks and even whole neighborhoods.
(Gray and Okrent, 2010)
In the 1989 documentary Roger & Me, Michael Moore recounts the lack luster
attempts the city of Flint has made towards recovery after the departure of GM. The city
of Flint tried to build a tourism industry by opening a shopping center, a luxury Hyatt
Regency hotel, and AutoWorld theme park and museum, all of which were closed within
a year. The film presented the attitudes of the richer residents of Flint and some of the
GM officials who thought most of the former GM employees were lazy in their search for
a new job. The reality of their situation was grim; they faced evictions and were often
18
forced to take jobs at fast food restaurants or take jobs in door-to-door and out-of-home
sales. At one point the rat population exceeded the human population in Flint because
of all of the abandoned homes and poor sanitation due to budget cuts. Moore portrayed
the GM officials as being unsympathetic to the people of Flint and being more
concerned about the health of their business than their former employees.
The recession in Flint, as in many old-line manufacturing cities, is making an
already bad situation worse. City employees such as police officers and firefighters are
being laid off due to the huge city deficit. Many public schools are being closed or have
closed already (Gray and Okrent, 2010). As of 2010 the average national
unemployment rate was 9.6%. For Michigan as a whole it was 12.8%, and Flint was at
13.0%. (Graph 1) (Figure 4B and Figure 5B)
Graph 1, Unemployment Rate: Flint, Michigan, National (Department of Numbers 2011)
Flint unemployment makes a large increase in 1998 when the GM plant closes. With this spike it raises
well above the national average at the time, and also the Michigan average. While the rate for Flint
follows the general movement of the national and state unemployment rates it tends to fluctuate much
more. This graph may reflect the layoffs and other changes that took place at GM.
____ Flint
____ Michigan
____ National
19
20
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One way Flint is searching for a way out is by a planned shrinkage program of its
city. Planned shrinkage became a feasible idea in Michigan a few years ago when state
laws changed regarding properties foreclosed for delinquent taxes. Before this change
most abandoned properties were tied up in legal limbo just contributing to the problem.
Now they can quickly become property of the county land banks, giving communities a
powerful tool to change things. (Gray and Okrent, 2010)
Right now Flint’s population is 110,000, and about a third of these people are
unemployed and live in poverty. Flint has about 75 neighborhoods spread out over 34
square miles. It will be a tough process to decide which neighborhoods to save and
which ones to tear down. In the last year the county has acquired about 900 homes,
some from healthy neighborhoods. By downsizing, Flint will renew some areas of town
and demolish others. This decision was not easy but Flint has to move ahead and face
the reality of the current situation (Gray and Okrent, 2010).
In July of 2009 Dan Kildee, the treasurer of Genesee County commented that,
“There’s an obsession with growth and expansion. I’m not against growth. But what we
really have to do is recognize that the city has already shrunk, and because we’re not
growing does not mean we can’t be a good city.” (Brooks, 2009)
A movement in which he believes strongly is “going green.” Flint needs to look at
the design of the city block by block and decide what to let nature take back and where
to create some intentional open and green space so that the 100,000 residents can live
in a city that doesn’t look half deserted (Brooks, 2009). This would save money on city
22
services like fire, police and sewer and focus limited city resources and investment in
neighborhoods that are more viable. Almost a quarter of the city could be bulldozed or
transformed into green space. In fact, this has already begun. (Brooks, 2009)
In one neighborhood on Flint’s east side a community garden has been planted
where five homes used to stand. This provides free fruits and vegetables to this part of
the city. What was once a virtual wasteland is now providing food for residents and is a
factor in community development (Brooks, 2009).
This is a small step but not a viable solution for everyone. For those who are still
living in homes that they built to raise their families, there is much fear and uncertainty
of what will happen to them. Many homes in neighborhoods are no longer fit for
habitation and need to be demolished. But that doesn’t mean that other residents want
to lose their homes. There are two options here, one would be to give these
neighborhoods a green makeover so that residents have a decent area to live in, or
offer them the opportunity to move to more high density, higher-functioning areas.
(Brooks, 2009)
By going smaller and greener Flint could be a stronger Flint, but cost issues and
political challenges exist. Flint is recovering in a culture that is based on economic
expansion and growth; proponents of shrinking cities have to make a case that
shrinking the city is not giving up but that by making Flint smaller it could be a better
city. (Brooks, 2009)
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Kenosha
Chrysler in Kenosha, Wisconsin closed an engine plant which put 850 people out
of work in 2010. Back in 1988, the company cut 5,500 jobs by closing a plant along the
lake shore. Below is a graph showing the unemployment rate for Kenosha from 1990
through 2011. The city spent $50 million to demolish an old building along Lake
Michigan, clean up environmental problems and build streets. At one time Harbor Park
in Kenosha was the fenced in ruins of an abandoned auto plant. The photo below
(Photo 3) shows the Kenosha plant during the mid-sixties while still in operation
(Ziemnowicz, 2004).
Abandoned in the 1990’s Kenosha took almost a decade to renew the
abandoned site. Now, an impressive collection of more than 350 upscale
condominiums, two museums, walkways, parks and a marina have been built on
Kenosha’ lakefront, Harbor Park has become an example of urban and industrial
renewal for Kenosha (Figure 3A). Although technically a success, fewer than 100
people now work there, most of them behind cash registers or waiting tables (Janesville
Gazette Staff, 2010). Along with the revitalization of the lakefront, downtown area has
also seen improvement. The loss of the automobile industry gave Kenosha a chance to
redevelop its city and Kenosha chose to do just that. (Brooks, 2005)
Even three years after Chrysler closed more people believed that Kenosha had
become a better place than before the closing of the plant. In 1991, 26% of a surveyed
group of Kenosha residents found it a very desirable place to live compared to 18.4% in
24
Graph 2, Kenosha Unemployment Rate (U.S. Department of Labor: Bureau of Labor
Statistics, 2011)
Photo 3: Kenosha/Chrysler Plant (Ziemnowicz, 2004)
25
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1987. This is because the economy had become diversified with 4,000 non-auto
industry related jobs, and because more Illinois residents moved to Kenosha looking for
lower cost housing (Moran, 1991). Moran (1991) cites Kenosha News (1989) that in
1989 Kenosha annexed 1,500 acres from the Town of Pleasant Prairie to the city. With
the increased revenue from taxes earned from this annexation, Kenosha was able to
pay for the improvements to Lakeview Corporate Park. In the same year, Governor
Thompson backed the $2 million state grant, which helped with the city’s recovery plans
(Moran, 1991).
The newly developed harbor has become a haven for Milwaukee and Chicago
commuters looking for affordable lakefront property. Harbor Park condominiums are
seeing a 15 to 10 % appreciation annually. Two to three years ago you could purchase
a condominium for around $100,000, now they sell between $200,000, for a small unit,
and for a larger unit $700,000. (Brooks, 2005)
Due to the proximity to Harbor Park the downtown has seen expansion including
the opening of several new restaurants, clothing stores, a wine bar, and shops. Further
development is planned with the building of a nine story condominium tower and a 60room hotel. Special events such as the tall ships festival, a 2006 country music festival,
an outdoor marketplace, the Kenosha Public Museum, located just east of the parkway,
and the Civil War Museum all help to revitalize this abandoned automobile plant site.
(Brooks, 2005)
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As of 2010 Kenosha County’s population is 162,921 and has seen a population
growth of 8.31%. As of 2010 unemployment in Kenosha County is 11.1 % with a U.S.
average of 9.7% (Figure 6B). Recent job growth is negative and Kenosha jobs have
decreased by 0.80%. But from the bleak past with the loss of the automobile industry
Kenosha has taken strides forward in rebuilding and growth.
Janesville
One year after General Motors shut down in Janesville vacant homes and for
sale signs line the streets. The Lear Corporation that once built seats for General
Motors and GM Plant that was once the heart of the community now sit vacant. For
residents of the Janesville community it has been a year of tough times and hard
choices. Trying to find jobs and finding none locally is depressing and frustrating for
many in the community. Some residents have taken transfers to GM plants in Kansas
and Texas, forcing them to move and in some cases face long commutes and time
away from family and friends. Some have returned to school to learn new trades and
embark on new careers. (Glauber, 2009)
Many remain optimistic about the future and feel that the community will
persevere. Right now in the early stages and still reeling from the loss Janesville is still
looking for a way to lure the thousands of jobs needed in a post-GM community. Few
believe that vehicles will ever roll off the assembly line in Janesville again. (Glauber,
2009)
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Others have chosen instead to learn a new trade. In Janesville, former
autoworkers have prompted record enrollments at Blackhawk Technical College and
UW-Rock County. For example, a former Lear employee is working towards a degree in
supply chain management at UW-Rock County, and a former GM employee is working
towards a diploma in industrial management at Blackhawk Technical Institute. These
are just a couple of examples of how displaced workers are taking charge of their
futures. As with any disaster, these displaced workers are working to rebuild their
families’ lives and their communities (Janesville Gazette Staff, 2009).
The other side is for those workers who took transfers to other plants in Kansas
City, and Arlington, Texas. Many of these workers have left their families behind and
commute home on weekends. Although this is difficult on families, some consider it
better than being unemployed. Al Hammer is grateful to have a job after the GM plant in
Janesville closed but struggles to say goodbye to his family when he leaves for Kansas
City each week. Hammer spends hours on the road commuting 530 miles one way, a lot
of money on gas and oil changes, but the hardest part is saying good-bye to his 11-year
old daughter. It’s a difficult change in his life but he needs to go where the money is.
(Spicuzza, 2009)
Over 500 former GM workers from the Janesville plant have transferred to other
company locations around the country. Some have sold their homes and relocated,
while others have chosen not to uproot their families and are trying to manage long
distance marriage and family relations. These separations could last for years while
30
families wait for children to graduate from school, a family home is sold, or a spouse
can retire. (Spicuzza, 2009)
Despite the separation, families are happy that loved-ones have jobs. More than
1,200 people lost their jobs when GM closed the 90-year old Janesville plant and after
the closing of related supplier companies. Unemployment in Janesville has climbed to
10.9 percent, the highest of all metro areas in the state, making the chance of finding
local jobs bleak. (Spicuzza, 2009)
For about every 4,500 GM and auto supplier jobs that disappeared, another was
lost outside the industry. The ripple effect has been enormous. About 9,000 of the
county’s 75,000 jobs vanished. (Janesville Gazette Staff, 2010)
Bob Borremans, is the executive director of the Southwest Wisconsin Workforce
Development Board. He gives a four step economic outlook for a community after a
major plant closes. The first is the closing of the facility, then the loss and end of
benefits. For Janesville this started with the slowdown of production at the General
Motors Plant, which then triggered the layoffs of more than 3,000 workers in the local
auto-manufacturing sector. Workers at GM and their supplier companies Lear
Corporation and LSI happened in three waves. First GM shut down, then Lear Corp.,
and finally LSI. Then this was followed by the consolidation and loss of a smaller supply
market, and the eventual collapse of the local real estate market. When the benefits run
out is when the really high stress levels kick in. The loss of a major business is a form of
economic death. The community will go through a seven-step grief process just as if
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facing a death of a friend or family member. It starts with the shock and progresses
through the denial, anger, bargaining, depression, testing, and acceptance. (Janesville
Gazette Staff, 2009)
According to the Department of Workforce Development, Janesville’s
unemployment rate as of April 2009 was 12.9%, the highest in the state at the time
(Table 1). 2010 unemployment for Rock County is still holding steady between 12.7%
and 17.1% (Graph 2). Unemployment for 2010 in (Figure 7B) shows Rock County
broken down by block groups. A block group is the percentages of unemployment per
area by population. A city that once flourished now has many citizens standing in food
lines run by ECHO that has never seen this much need in its 35 years of operation.
Many believe the worst has yet to come. Once unemployment benefits run out things
will get harder for displaced workers. (Glauber, 2009)
Rumors were around for years that General Motors would close in Janesville but
many still held hope for its continued survival. Now in the early stages and still trying to
accept the fact that GM is gone many still wonder where Janesville will go from here: a
new future and development without GM or a downsizing, like Flint is experiencing.
While the displaced workers have moved on in the two years since the plant
closed its operations in Janesville, the plant sits eerily idle with no immediate future
plans. GM did retain this plant in its bankruptcy under the category of a standby plant if
the automaker needed more space to build cars and trucks. Not much can be done with
32
Table 1, Unemployment rate for select Wisconsin Cities (Department of Workforce
Development, State of Wisconsin, 2009)
Metropolitan Statistical
Area
Wisconsin
Appleton
Eau Claire
Fond du Lac
Green Bay
Janesville
La Crosse
Madison
Milwaukee-Waukesha-West
Allis
Oshkosh-Neenah
Racine
Sheboygan
Wausau
April 2009
March 2009
April 2008
8.8%
8.6%
7.4%
9.0%
8.4%
12.9%
6.8%
6.0%
8.9%
9.4%
9.4%
8.7%
10.1%
9.2%
13.6%
7.7%
6.5%
9.0%
4.2%
4.0%
4.1%
4.0%
4.0%
4.8%
3.4%
3.0%
4.0%
8.1%
10.6%
9.2%
9.0%
8.4%
10.7%
9.9%
9.4%
3.8%
5.0%
3.6%
4.1%
Graph 2, Janesville, Wisconsin Unemployment (Department of Numbers, 2011)
The graph below demonstrates how much the unemployment rate fluctuates in Janesville compared to
the changing, but still relatively stable state and national level rates. In the late 2008 to early 2009, there
are steep increases in unemployment at all three levels, but again Janesville appears more affected by
both the loss of General Motors and the national economy.
____ Janesville
____ Wisconsin
____ National
33
34
the plant until GM decides whether or not they need it. There are two possible scenarios
for the future of the Janesville plant. One would be some sort of GM production.
Unfortunately for Janesville, GM is more likely to use Michigan where tax incentives are
being offered that Janesville can’t match. The other would be if GM decides it no longer
needs the plant and agree to either sell it or donate the property to the community or a
third party developer. Whatever happens, Janesville has to look to the future and what
is best for its community.
Discussion and Conclusions
Cities build their communities with population growth that is encouraged by local
job opportunities. Those communities that are built primarily around one industry such
as the automotive industry can have great growth and prosperity but are also can be
faced with great challenges when that industry experiences losses or departs.
Janesville, Wisconsin, Flint, Michigan, and Kenosha, Wisconsin, are examples of
the challenges faced with the loss of the automotive industry in their communities.
These three communities along with many others in the United States put a great deal
of faith in the stability of these companies and what they promised to their cities growth
and prosperity. Betrayal and shock are now what most displaced workers express
when asked how they feel about the closings. Many just thought it would never happen
in their towns. After the shock these areas now have to come up with solutions to their
survival.
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For Flint Michigan, the inability to draw other major industry and jobs needed for
displaced workers have forced them to downsize the city itself. Realizing that Flint will
not return to its automotive industry days it is working to salvage what is left of its
community and revitalize what remains.
Kenosha has been rebuilding and revitalizing the lakefront that once held the
Chrysler plant. Harbor Park has brought about re-growth of the downtown, increased
property values, and added needed jobs. While Flint has been forced to make the city
smaller by condensing the city Kenosha has torn down the old Chrysler plant and
brought in new condominiums, a beautiful park, marina, museum, and housing, and has
annexed area from a neighboring town. With the given location right on the lakefront
and help from a state grant, Kenosha had the opportunity to redesign and refocus on a
new future.
For Janesville, the steps that need to be taken towards economic and community
development remain undecided. Recent into its loss of General Motors there is still
much to be done. Economic development for Janesville like Flint, and Kenosha will be
an ongoing process. Janesville does not have enough jobs to accommodate all the
displaced workers, especially with high paying jobs. Encouraging new industry into the
community will be essential to Janesville’s recovery. Unfortunately this is not a problem
to be solved overnight and many displaced workers are now faced with loss of benefits
and unemployment payments, which will only add to the already struggling economy.
36
Diversity is a good thing in any investment and is essential when building a city
and community. It is not wise to put an entire savings in one piece of stock because
when that stock value drops, there is little or no investment left. That is what is
happening on a much larger and more devastating scale in Janesville. So much was
invested in General Motors, the city now has to accept its losses and decide how to
start over and move forward to ensure the success of its community. This is not only
true for the city itself but for the thousands of displaced workers and their families which
now face uncertain futures as well.
If time were to allow, further research would be directed towards how the cities
grew up around these automotive corporations in the first place and how secondary
companies are affected. For example, the fast-food industry focuses on these cities and
attracts plant employees by having extended operational hours.
37
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