GM might build Chevrolet Equinox and GMC Terrain at Spring Hill plant
It is not clear how many people will be hired or brought off layoff from UAW Local 1853 this year in Spring Hill or what will be assembled there. But the Tennessean is reporting tonight that it likely will be the Chevrolet Equinox and GMC Terrain, which are assembled at the CAMI Automotive and Oshawa plants right now in southwest Ontario north of Detroit.
The plan likely will be to continue to produce the Equinox (pictured) and Terrain at the Ingersoll and Oshawa plants in Canada, with Spring Hill picking up overflow, to keep up with the big demand for them. This would bring GM cars and trucks to market faster. Before, only Saturns and Chevrolets came out of Spring Hill.
Going into production, Spring Hill has a measurable quality and speed standard to meet: CAMI assembles 945 finished Equinoxes per day, according to the local paper, the Ingersoll Times.
Questions about hiring and what the workers will do will be determined, officially, after the contract agreed to late Friday by General Motors and the UAW is ratified in the next week or two.
"It's very encouraging news, it's very positive news," Spring Hill Mayor Michael Dinwiddie told the local paper, the Daily Herald of Maury County, in an interview today. "I'm certainly very optimistic, and it's great news for this area. ... Hopefully this does come to fruition and once again change the history of the area -- start producing cars again, start lifting up the economy."
In an earlier interview, the mayor reinforced the point: “Everyone I’ve talked to is optimistic that something positive is going to happen with the plant. The tricky part is pinpointing a time when that is going to happen.”
Reversing course toward better days is happening because General Motors has righted its financial ship, generating $10.4 billion in profits so far this year and last. To keep the cash flow flowing, GM knows it must spur sales and to sell more cars and trucks there must be more places making them, and more overtime and people hired to assemble them.
Right now, the price is right. While veteran auto workers are paid handsomely at almost $60 an hour when marrying wages and benefits, a rookie auto worker makes around $14 an hour. Even with wage increases for new workers expected to take effect under the new UAW contract, it is still affordable for GM to hire people for its plants because profits are soaring.This evening, The Associated Press reported that pay increases of as much as $3 per hour will be awarded to new hires and entry-level auto workers under the new contract. GM and the union declined to confirm that.
To get things rolling, General Motors is expected to turn first to reopen Spring Hill as part of a promise to the UAW to reopen or build a plant a month every month for the next 18 months. Elected and union officials in Tennessee have been told they're getting the plant reopened in some form. Since the plant stopped making cars, about 1,100 auto workers have remained on the payroll making engines and another 500 workers will be hired soon by GM to handle that growing workload.
U.S. Sen. Bob Corker, R-Tenn., predicted in 2009 that Spring Hill would be back to full employment someday.
"I’m saddened by the effect this will have on the many families who derive their incomes directly from the Spring Hill plant as well as the suppliers and vendors who depend on it," he told reporters after GM stopped assembling cars at the plant. “Tennessee is one of the best places in America to build cars, and Spring Hill is one of the most modern, adaptable plants in the country, so we remain hopeful that Spring Hill ... will move back into production if the economy improves."
Officials in Maury County, Tenn., lobbied GM hard to get their plant back. Spring Hill's Mayor Dinwiddie and several other officials, including two other local mayors, came to Detroit Sept. 15 to make their case and "to meet GM officials and emphasize the importance of the Spring Hill plant to Maury County," the local Daily Herald reported. The job and revenue losses have had an adverse effect on the county that they'd like reversed with GM investment dollars.
The Tennessee officials told Daily Herald reporter Richard Conn that Diana Tremblay, GM’s global manufacturing chief, assured them "the Spring Hill plant would be the first option" for a new GM plant, presuming demand warrants it. The Equinox-Terrain model fits that threshold.
The plant that was formerly the exclusive home for the assembly of Saturn automobiles closed in November 2009, when General Motors was hemorrhaging money hand over fist. GM chose to stave off imminent death with a painful restructuring. The restructuring was nurtured by President Obama and the federal government, which dangled a huge bailout loan as a carrot. The giant American carmaker stayed afloat by taking a $49.5 billion bailout loan from the government while at the same time deleting employees, plants, brands and dealerships.
Closing the home of Saturn was a hard choice for GM to make. At its peak, about 200,000 Saturn cars and trucks were made in Tennessee in a given model year, and they were made well. It sounds like a lot but in the scheme of things it is microscopic: General Motors manufactures about 13 million cars and trucks a year in America annually.
Former Tennessee Gov. Lamar Alexander, a senator now, was optimistic instead of bitter as GM weighed whether to shelve the plant. He told reporters in 2009 he was sure GM would come back running when its financial house was fixed.
“For the longer term, there is no reason why the new GM cannot build cars and trucks at Spring Hill more competitively than at any other location in America. Tennessee offers hundreds of suppliers, one of the country’s best four-lane highway systems, a right-to-work law, thousands of trained workers and low taxes."
Workers at the plant were exclusive to Saturn assembly from the time the factory opened with much fanfare in June 1990 until spring 2007, when Spring Hill after a retooling morphed from being Saturn only to serving GM in general under a contract signed by the automaker and the union and ratified by the workers in 2004. But there was no true shift to Chevy and other GM products until 2008.
It was at that time that General Motors began farming out production of Saturns to plants in Georgia, Delaware, Kansas City, Mexico and Belgium. One of the last survivors in Spring Hill was the Saturn Ion, which was replaced in 2008 by the Astra. In its short life it was assembled in Belgium.
After closing Spring Hill briefly to add metal stamping capabilities, employees started manufacturing the Chevrolet Traverse in 2008, while readying to take on other GM cars and trucks. That lasted until production of the Chevy Traverse was shifted after the shutdown to Lansing, Mich.
When it was in full use, the Spring Hill factory had a 4-cylinder engine assembly plant, an auto assembly plant, a paint and plastics plant, a parts warehouse and visitors center. A Saturn Web page is still on the Internet offering tours of the plant. But you can't really take a tour. All of the links that were on the Saturn visitors page today were dead.
The Saturn brand is also dead, even as the iconic plant that made its cars an American favorite is being resurrected.
Hawke Fracassa covers the auto beat from Detroit for TN. You can reach him at [email protected] and (248) 747-1550. Or follow him on Twitter @HawkeFracassa.