GM overhaul puts Spring Hill on hold

By G. Chambers Williams III • THE TENNESSEAN • June 2, 2009 General Motors could decide within the next three months whether Spring Hill or a plant in Orion Township, Mich., will become the manufacturing site for a new subcompact car that the automaker originally intended to import from Asia. triggerAd(1,PaginationPage,8); If the car goes to Spring Hill, it would replace the Chevrolet Traverse large crossover, whose production will be moved to Lansing, Mich., in December under plans GM announced on Monday in connection with its bankruptcy reorganization. "We don't expect it to be a long, drawn-out process," said Mike Herron, chairman of United Auto Workers Local 1853, which represents about 2,900 hourly workers at Spring Hill, most of whom will be idled when Traverse production there ends in late November. Eric Sasaki, 50, a United Auto Workers Local 1853 member who has worked for GM since he was a teenager, said he is thinking about a variety of options, including retirement, moving out of state to work at another GM auto plant that has a clearer future, or waiting to see Spring Hill's final fate. Some workers may able to follow production of the Chevrolet Traverse to Lansing's Delta Township plant, Sasaki said, adding that his fiancee of nine months now goes to school in Michigan. "I have to weigh all of the options out," he said. "The news isn't the best news we could have gotten, but it's not the worst either," Spring Hill Mayor Michael Dinwiddie said. "They could have closed the plant today, and we could be faced with something different." There is a lot of uncertainty over how long Spring Hill might remain idle, and that has left some workers angry and confused about their futures with the U.S. auto industry giant, the mayor said. "This plant is still in GM's inventory. It's still a resource GM can use. This just buys us some time." State officials said they're willing to bring tax credits and other state funds for job training to bear in negotiations with GM if that helps to persuade the carmaker to bring a new product to the site. "We'll compete in the same way we competed for Volkswagen and Nissan, and see if we can't bring it home," Gov. Phil Bredesen said at an afternoon news briefing. "We'll do it responsibly, but we'll be aggressive about getting some jobs there." The plant recently underwent nearly $1 billion in modernization. "I find it difficult to think that General Motors would just walk away from it," Bredesen said. Some plants on standby GM said that Spring Hill and the Orion Township plant — 30 miles from Detroit — would be placed on "standby," and that one of them would be the assembly site for the new small car. That was among promises made to the UAW under terms of a revised labor agreement hammered out and approved by union members last week. Overall, GM plans to close two other assembly plants; shut three stamping plants in Michigan, Indiana and Ohio, while putting another stamping facility in Pontiac, Mich., on standby status; and close five additional engine plants and three parts/warehouse operations in several states. A New York powertrain plant that closed in early May was previously announced. Several analysts said the face-off for small car production is a competition in which Spring Hill may hold an edge over Orion. Orion now assembles the Chevrolet Malibu and Pontiac G6, but the Malibu is also made in a plant in Fairfax, Kan., which also builds the Saturn Aura. The G6 and Aura are being discontinued within the next two years as GM sheds its Pontiac and Saturn brands. Moving Traverse production to Lansing was widely expected, as that plant in GM's home state already assembles three siblings to the Traverse: the GMC Acadia, Saturn Outlook and Buick Enclave. The Outlook will be discontinued when GM phases out production of Saturn vehicles, probably by the end of 2011. New-car details unclear Although exact details of GM's planned new small car have not been released, speculation is that it could be the Chevrolet Spark, a mini-car designed by GM's Daewoo subsidiary in South Korea. GM introduced the Spark to U.S. consumers at the New York auto show in April, saying the car would go on sale here in 2010. A similar model with the same name has been on sale in India since 2007. "They said it would be the smallest car they build in the U.S., and that it was being designed in the South Korean operation," UAW Local 1853's Herron said. "And it does appear to be a Chevrolet product." Jeremy Anwyl, CEO of the automotive consumer Web site Edmunds.com, said he expects the new car to be "the Spark or something of that size." He said that he expects GM to announce details of the car, and its production site, within three months, and that Spring Hill would seem to be the "most logical" place to put it. "Tennessee seems to have the advantage because of the recent investment GM made in the plant there to make it flexible." The automaker spent nearly $800 million in 2007 and 2008 to convert the Spring Hill plant from a Saturn factory to a modern, flexible assembly facility that can be reconfigured quickly to manufacture any vehicle that GM makes. Jim Hossack, an analyst for the automotive consulting firm AutoPacific, said that he doesn't believe the new small car will be the Spark, but that it would be something of a similar size, which would be intended to replace the current Chevrolet Aveo. The Aveo also is a GM-Daewoo product, built in South Korea. GM said in April that the Spark would be the replacement for the Aveo, but analysts said Monday that with all the uncertainty surrounding the company's bankruptcy filing, GM's past plans may be completely changed by now. Even if Spring Hill doesn't get the new small car, the plant will try to keep itself ready for any other new vehicle for which GM might need a production site, Herron said. "If we don't get that car, we'd then look at any of the other vehicles lined up in the next-generation product portfolios," the union official said. "We're positioning the plant to make sure we have what it takes, infrastructure and people, and we will market our facility to let people know we have a state-of-the-art plant." Traverse production will cease at Spring Hill "around Thanksgiving," which will idle about 2,500 hourly workers at the plant, at least temporarily, Herron said. The rest of the hourly workers will continue to be employed in the engine, metal stamping, plastic injection-molding and parts-warehousing operations, which will not be affected by the end of Traverse production. "This isn't great news, but it's better (than) the alternative," said Mike O'Rourke, Local 1853's president. "It's good for Spring Hill we're still in the fight." Workers to get pay Herron said that while the plant is idled, workers will receive 70 percent to75 percent of their regular take-home pay for up to 52 weeks, depending on seniority. After that, they will get up to 50 percent of their pay for an additional 26 weeks, he said. A GM worker at Spring Hill makes an average wage of about $25 an hour. How long the assembly line may be idle isn't known, but if GM were to give Spring Hill the new small car, the shutdown could be just months, union officials said. Bredesen said the state plans to do what it can to entice GM to put the small-car assembly operation at Spring Hill, including offering the carmaker incentives and training money. "I am disappointed that the Spring Hill plant has been idled," Bredesen said. "But I am encouraged it is not one of those being targeted for closure." He said he has already started talking to GM officials about bringing new life to the plant. "It is a modern plant," he said. "It is a very flexible plant. It has a good work force." Herron said workers at the plant had mixed reactions to the GM announcement — sad that Traverse production would end, but glad that the plant was put on "the list of good GM assets in the bankruptcy" and not closed permanently.