Waiting game: Spring Hill anxious about future after GM bankruptcy

Waiting game: Spring Hill anxious about future after GM bankruptcy

City hopes plant will gain new vehicle

Nashville Business Journal – by Jenny Burns Staff Writer

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Barber shop owner Dianne Colley cuts the hair of many workers at the General Motors plant in Spring Hill, and she worries if she’ll still have them as customers.

One of her clients is taking the early retirement package offered at the plant to cut jobs. Several others are requesting transfers to other cities to keep their jobs with the giant automaker.

Business is down 30 percent at the ABC Barber Shop, says Colley, who’s anxious about whether the GM plant will close.

“It’s going to hurt the economy down here when they close up,” she says. “Everybody is just waiting to see what happens.”

Uncertainty hangs over Spring Hill as its largest employer has shaken confidence. Real estate and retail sales are lagging as folks wonder about the future of this bedroom community about 30 miles south of Nashville.

GM workers returned to work this week after a seven-week shutdown, but they know that come November, the plant will idle unless the automaker brings another car line.

GM spent $690 million overhauling the Spring Hill plant, and its 2,950 workers were building the Chevrolet Traverse sport-utility vehicle. But during its bankruptcy, GM announced that it was moving Traverse production to Michigan, saying it will idle the Spring Hill plant in November except for about 600 workers who will make parts.

The summer closure sent Maury County’s unemployment rate skyrocketing to 17.3 percent in June, the ninth worst rate in the state of Tennessee, up from 11.8 percent in May.

Last week was the deadline for workers at the plant who were offered buyouts to take them, but a GM spokeswoman would not say how many took the offer. The automaker also has not said how many Spring Hill workers will have the option to follow the Traverse to Michigan, says Andrea Hales, plant communications manager.

The impact of GM’s woes on the area’s economy is hard to separate from the recession gripping the nation.

Frank Tamberino, president of Maury Alliance, the county’s economic development agency, says interest has picked up from retailers looking to locate in Spring Hill. But getting that interest to turn into signed contracts has been difficult.

Retail sales tax collections have dropped 3 percent in Maury County in the past 12 months to $61.9 million.

Home builders say the unknown fate of the plant has had an impact on sales.

“We have had quite a few people that have looked at buying and are telling me they are waiting to see what is going to happen with the plant,” says David McGowan, president of Regent Homes, who has a development in Spring Hill called Arden Village.

He’s built one single-family home, five townhomes and 12 condos there, but decided to lease the condos about a month ago because sales were so slow.

Sales of single-family homes in Spring Hill were half of last year’s levels in January and February, dropped 30 percent in March and April and fell 70 percent in May and June. By comparison, sales of single-family homes have been down 3 percent to 6 percent for those same months in Greater Nashville.

GM reopened the Spring Hill plant in October after a year of modernizing the plant to produce the Traverse. With the Traverse shifting to Michigan, GM says the plant “could be brought online at some point in the future should GM require additional capacity due to increased market demand.”

In June, GM chose Orion Township, Mich., over Spring Hill for production of a small car. Community leaders now hope GM will send another vehicle here.

“If we are getting another vehicle, then we’re rolling,” says Jimmy Dugger, a broker in Crye-Leike’s Columbia office.

Dugger says building in Spring Hill and neighboring Columbia has slowed drastically, with a handful of builders putting up new homes.

Spring Hill has an 11.5-month supply of homes on the market. That could shoot up if a large number of GM workers take transfers.

Trey Lewis, sales director at Ole South Properties, says builders are anxiously watching how many workers are staying or moving. A major exodus could flood the resale market with homes, he says.

Jim Smith, interim city administrator in Spring Hill, says he expects the automaker to give Spring Hill more work.

“I can’t see that they would let it sit idle for too terribly long,” he says.



 

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