Experts say there's virtually no chance Janesville will hold onto any General Motors production past 2010 despite efforts promised by state and local officials to keep the plant running and retain some of its 2,390 employees.

"Realistically, (the chances are) very, very, very small," said Brett Smith, senior industry analyst with the Center for Automotive Research in Ann Arbor, Mich.

"GM simply has too many facilities in the system, if you look at where its market share is today," said Catherine Madden, senior analyst for Global Insight's global automotive group in Troy, Mich. "There isn't any sort of recovery expected that could bring those plants' closures out of the mix."

The Janesville factory, open since 1919, is one of four truck and sport utility vehicle plants that will close, GM chief executive Rick Wagoner said Tuesday. Production of mid-size Isuzu trucks will end in 2009 and the last SUVs are slated to roll off the line in 2010 or earlier, depending on demand.

Other plants slated for closing are in Oshawa, Ontario: Moraine, Ohio and Toluca, Mexico. GM also is considering discontinuing the Hummer brand. In all, 8,350 jobs are being cut and GM will save $1 billion a year, Wagoner said.

Production of some smaller cars will increase, and Wagoner said the company's board of directors has approved the Chevrolet Volt plug-in electric car, scheduled to hit showrooms by the end of 2010.

U.S. economic conditions have become "significantly more difficult" since January, Wagoner said. "Higher gasoline prices are changing consumer behavior."

Demand for the Chevrolet Suburbans and Tahoes and GMC Yukon SUV models built at the Janesville plant dropped 35 percent in the first three months of 2008 from year-ago figures, Troy Clarke, president of GM North America, said during a telephone news conference. Resale value of the vehicles have dropped a similar amount, he said.

"What we've seen is more permanent than cyclical (drop in) demand," Clarke said.

GM stock closed at $17.58 Tuesday, up 14 cents.

Little hope for plant

Wisconsin politicians from Washington, D.C., to Janesville are vowing to push for production of a new GM vehicle in Janesville. Clarke did not completely rule that out, saying GM is not announcing the plant's closure. "That type of announcement is out there a ways." But he left little hope.

"Our current view is that a new product is not likely. I don't want to leave an artificial sense of optimism," he said, adding, "Never say never."

Auto analyst Smith has participated in industry education programs at GM and Ford plants around the country. He has visited the Janesville plant numerous times in the past five years and spoke of the workers there with affection.

"The folks in Janesville are a great group of people, the best group of folks I have dealt with on my tour of GM facilities," Smith said. But the factory has too many strikes against it, including its location far from where components such as engines and transmissions are made, he said.

"So much of it now comes from Mexico and overseas and new suppliers in the South that Arlington, Texas is, frankly, a better location," Smith said.

Three years ago, GM invested $175 million in the Janesville operation to make the new models of the SUVs. When that production began in 2006, the plant had 3,900 employees.

Today, 2,200 hourly workers and 190 salaried employees remain. But more than 750 of those positions will end in July when the Janesville plant consolidates from two shifts to one. The effect of that will be lessened because about 600 workers have signed up for a buyout package GM offered through May 22, accepted by 19,000 employees nationwide.

The others won't be offered that option. "At this time, there are no plans to extend the special attrition plan," said GM spokesman Chris Lee in Pontiac, Mich.

Clarke said some Janesville employees may be able to transfer to other GM plants. Those conditions will depend on contracts with the United Auto Workers union. A new four-year contract was ratified by UAW members in October following a two-day nationwide strike. It set lower pay for some workers and put retiree health care into a union-run trust in exchange for promises of future work at U.S. factories.

Industry analyst Smith said the Janesville plant's demise became clear when GM announced in 2006 that hybrid SUVs would be built at the Arlington factory. "My belief was that they were going to put that hybrid at the plant they were going to keep. When it went to Arlington, to me, that was bad news" for Janesville, he said.

UAW leaders upset

UAW leaders were clearly upset about the planned closing.

Local 95 shop chairman John Dohner, Jr. lashed out at those who buy foreign-made products.

"Where is the pride in America?" he asked. "The way it's going right now, none of us is going to have a job."

Retiring Local 95 President Mike Sheridan said gas prices are "the latest and most severe threat to hit the Janesville assembly plant, including the Great Depression, a world war and the oil crises of the 1970s."

News of the closing announcement leaked to workers at the Janesville plant Monday night, said Johnny Pruitt, 49, a second-shift electrician.

Pruitt, a 16-year employee, said he will look into transferring to another GM plant. He's not worried about his own immediate finances, as his house is paid for and he has few debts. But that probably puts him in the minority, he said.

"A lot of people have a lot of toys — boats, motorcycles, RVs, you name it — and big house payments. So, it's going to be a problem for them."

Pruitt said he expects an immediate economic effect in the Janesville area. "It's going to snowball," he said. "People won't be eating out a lot, and I think you'll see some restaurants start closing."

Residents also are likely to start delaying major purchases and contributions to nonprofit organizations, said John Beckord, president of the private economic development group Forward Janesville. There will be more "skittishness" in the real estate market, he said.

Beckord said tourism also will take a sharp hit when the plant is gone. "GM tours were our top tourist attraction. There are buses every day that come in to tour that plant," he said.

Diverse economy

One advantage for Janesville is that the auto industry is no longer king in the area. At its peak, the GM plant employed more than 7,000 people and GM and its suppliers accounted for 12 percent of the region's economy. Now, they comprise 6.3 percent, said Dennis Winters, chief of the Office of Economic Advisors for the Wisconsin Department of Workforce Development.

Today, Mercy Health Systems outnumbers GM, with 3,800 employees. Dean Health System and the company that owns St. Mary's Hospital said Tuesday they will go ahead with plans to build a hospital and clinic in Janesville. The $140 million, 50-bed hospital will open in two years.

Janesville has been working to diversify its employment for several years, city manager Steve Sheiffer said, citing companies such as plastics manufacturer Prent Corp. and wholesale distribution centers among the solid employers.

Janesville is "absolutely resilient," Sheiffer said.

But David J. Ward, president of NorthStar Economics in Madison, said even with the diversification, it will take a five- to 10-year transition for Janesville when the GM plant closes.

Helping entrepreneurs start new businesses is one way to move forward, Ward said. "It has happened in the paper industry in the Fox Valley, where new companies like unwoven paper or consulting companies in process engineering have come out of downsizing," he said.

Ward also said with the baby-boom generation starting to retire, many industries anticipate worker shortages. "These are folks (at GM) that have experience. ... Janesville can try to use that as leverage for attracting other businesses," Ward said.

Laura Dresser, associate director of the UW-Madison's Center on Wisconsin Strategy, said replacing the salaries of GM employees will be difficult. Traditionally, they have been among the highest-paying factory jobs in the state.

"These are some of the premiere American manufacturing jobs and to lose them is always gut-wrenching," Dresser said.

Beckord, of Forward Janesville, said "our identity, our brand is in flux now." But he said he expects the Janesville area to push ahead, seeking new opportunities.

"I don't think tent-folding is part of our community's DNA," Beckord said.

State Journal reporter Doug Erickson contributed to this report.