Spring Hill holds its breath
Spring Hill holds its breath
Town’s economic future rides on GM’s impending plant closing decision
By G. Chambers Williams III
SPRING HILL — Michael Dinwiddie, mayor of this once-tiny community between the larger cities of Franklin and Columbia, Tenn., hopes his town’s future doesn’t depend on the whims of politicians in Washington, where members of President Barack Obama’s auto task force are crafting a new course for General Motors.
The selection of Spring Hill by GM in the mid-1980s for a new kind of auto plant to build Saturn cars put the town on the map, and since then, the population has blossomed to more than 25,000 people.
"The employees of that plant support our local businesses, and the plant pays $250,000 a year in lieu of property taxes," Dinwiddie said. "Not just us, but the whole region relies on the millions of dollars in sales and property taxes generated by the work force of that plant."
But that’s in jeopardy now.
Under a strict deadline from the government under terms of a federal bailout program that has already lent the automaker $15.4 billion to stay afloat, GM and the government task force must agree by June 1 which of the automaker’s remaining factories will close as it moves to become a smaller, more-efficient company.
Spring Hill could be on the hit list, but no one will know until GM is ready to announce its newest round of plant closings, which could come as early as this week.
The president of the United Auto Workers local in Spring Hill said the more than 3,000 jobs at the General Motors Corp. plant in Tennessee are in real jeopardy.
United Auto Workers Local 1853 President Mike O’Rourke said that in his opinion, the future of the hundreds of jobs at the assembly plant, which now makes the Chevrolet Traverse crossover utility vehicle, rests on a "coin flip" as GM prepares to phase out as many as 16 North American plants by 2011.
O’Rourke said he has been telling union members to "pray for the best but plan for the worst." He said Spring Hill could be in jeopardy because it’s not as close to parts suppliers as some other GM plants.
That makes townspeople uneasy. The plant remains the primary economic engine for Spring Hill and the surrounding area.
Community rallies for plant
The community has been rallying around the plant to try to boost its chances, but Dinwiddie and others involved in the lobbying effort acknowledge they’re worried.
But in bracing for the worst, these same officials are already looking ahead, planning an effort to market the plant to another auto company — perhaps a Chinese manufacturer hoping to open its first U.S. plant — should GM decide to close the facility.
There also is speculation that with GM’s planned spinoff of the Saturn brand — which got its start in Spring Hill — a new Saturn owner in need of its own assembly plant could consider Spring Hill as a prime location.
GM has significantly updated the plant in the past three years with a total expenditure for remodeling and retooling approaching $1 billion.
In its makeover, it has become the most modern and technologically advanced manufacturing facility in all of GM, said Mike Herron, chairman of United Auto Workers Local 1853, which represents the hourly workers.
"We have a very competitive site, which offers the latest in technology and flexibility," Herron said. "This is clearly the type of plant that GM is going to want as they move forward. But we are worried. No one knows for sure how this will turn out, and the deadline is fast approaching."
The union has teamed with local government, civic organizations and businesses to rally behind the plant and to send a message to GM and the Obama administration that Spring Hill needs to remain a part of the automaker’s plans.
But U.S. Sen. Bob Corker, R-Tenn., said politics could play a role in the decision, in that most of the other GM plants are in the upper Midwest, in states such as Michigan and Ohio that helped elect Obama in November — while a majority of Tennessee voters opted for Republican challenger John McCain.
Corker has been lobbying the Obama White House’s auto task force and GM Chairman Fritz Henderson on behalf of Spring Hill, and he has been pressing home the point that keeping the Spring Hill plant makes perfect business sense for GM’s future.
"What we can all hope is that this decision is made devoid of any politics," Corker said. "On the other hand, it was a huge mistake for this administration to take over this car company. This should have remained in the private sector.
"The day the White House picked up the phone and told then-CEO (Rick Wagoner) to resign, and told two-thirds of the (GM) board to resign … our country stepped over a threshold we have not stepped over in modern times," Corker said.
As to how big a role politics might play in the decision, Corker said, "Anytime something’s in the political sphere, I hate to say it, politics is involved. I hope it’s minimal. Obviously, it’s unnerving to most Americans that a U.S. central government is involved in a company in this nature. But the fact is that’s where we are, and we all are doing everything we can to make sure GM stays in Spring Hill."
Corker already has conferred with Tennessee Gov. Phil Bredesen about beginning an effort to find a new operator for Spring Hill if GM leaves, and he said he’s convinced the plant would be a great asset to other automakers that want a modern, efficient U.S. manufacturing facility.
"In the event GM does not continue to operate and portions of the plant become vacant, what you will see is a tremendous committed effort to see that some auto operation continues there," Corker said.
But no one is ready to give up on GM just yet.
"I don’t know if politics will play a part in the decision," said Spring Hill City Manager Jim Smith, who retired from a 35-year career in banking. "But I am cautiously optimistic. I think all of the positives of this plant, the newness, the reconfiguration, make it very valuable to GM. And even if they go into bankruptcy, they are still going to make cars."
Herron said the union and its members are optimistic, but aren’t taking anything for granted.
"We’re doing everything we can to put our best foot forward," he said. "The things that have been done in Spring Hill deserve to be looked at. We’re very proud of the pragmatic approach the union has taken at this site."
But no one is willing to venture a guess whether the efforts to save the plant will be successful.
"We’re all nervous," Corker said. "The company is in dire shape. Our goal is not only that (the plant) stay there, but that it moves to an around-the-clock operation and employs more people."
GM bankruptcy seems likely
Meanwhile, it appears almost a foregone conclusion that GM is headed for bankruptcy court as it strives to work out its financial problems, perhaps with even more federal government aid.
The legal tactic is viewed by some as the best means of reviving the company. But the speed of the U.S. government-led transformation to date has already triggered complaints in some quarters that the rights of investors and dealers are being trampled. Meanwhile, fears that a bankruptcy could lead to cascading business failures are spreading throughout GM’s vast chain of suppliers.
Some speculate that a GM bankruptcy could lead to the automaker receiving as much as $30 billion in additional federal loans. A cash injection that large would boost the U.S. investment in GM to nearly $45 billion.
The government previously indicated that it planned to take at least 50 percent of the restructured company, and probably would assume the right to name members to its board of directors, as it has at Chrysler, where the government will control four of nine seats.
In fact, the speed with which the Chrysler bankruptcy has proceeded may have given the Obama administration more confidence that the best path for GM is a similar trip to court, where the claims of disgruntled creditors and dealers can be more easily resolved.
Others are more sanguine. "GM now stands for Government Motors," said Rep. Lamar Smith, R-Texas. "While the UAW is cashing in, it’s the dealers, creditors and American taxpayers who are being forced to cash out."
Locally, UAW leaders point a finger of blame at Corker, saying his hard-line stance during auto bailout talks weeks ago helped put GM’s operations at risk. Corker said Friday he is doing everything he can to keep Spring Hill open, but O’Rourke of the UAW local said the senator "turned his back" on union workers by pushing for wage and benefit concessions that help foreign automakers.