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GM’s small car decision leaves Tenn. anxious

June 27, 2009

GM’s small car decision leaves Tenn. anxious

Associated Press

SPRING HILL, Tenn. – Workers at General Motors’ soon-to-be-idled assembly plant in Tennessee held out hope for a reprieve, but now it’s back to the waiting game.

GM’s decision Friday to build a new small car at a Michigan plant allowed that economically battered state to rejoice, while the announcement is likely a death knell for the third of the finalists in Janesville, Wis.

Officials in Tennessee now hope the Spring Hill plant near Nashville will be assigned a new product before it is mothballed.

‘In jeopardy’

Maury County Mayor James Bailey Jr. said he was frustrated that all the work that state and local officials have done to help develop the plant over the decades appears to "have been tossed aside and forgotten."

"The Spring Hill facility has been sacrificed, and its future has been put in jeopardy," Bailey said.

Mike Herron, chairman of United Auto Workers Local 1853, said Spring Hill was the only plant that could have built the new car without any investment.

"It’s not like we have an old facility with dilapidated equipment and a work force that won’t do anything," he said.

Michigan, Wisconsin and Tennessee all offered incentives to General Motors Corp. to lure the plant, but neither the automaker nor state officials disclosed details about the incentive packages.

Michigan’s package

"All three states made very attractive offers," Troy Clarke, GM’s president for North America, said in a conference call with reporters. "The folks in Michigan were very creative and brought a whole package."

The company said it would use an idled midsize car plant in Orion Township, about 40 miles north of Detroit, to assemble small and compact cars, including a subcompact model based on the Chevrolet Spark that is set to go on sale in Europe next year.

GM said it expects to start retooling in late 2010 and run two shifts at the plant by 2011, producing 160,000 vehicles annually. The move will save 1,200 jobs at Orion, plus 200 more at a nearby parts stamping plant.

Clarke said the retooling would cost the company $600 million to $800 million.

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