Will Spring Hill’s GM plant reopen?

January 12, 2010

Will Spring Hill’s GM plant reopen?

General Motors exec’s mention of TN plant stirs hope in Middle TN town

By G. Chambers Williams III
THE TENNESSEAN

A top http://www.gm.com/">General Motors executive’s remarks at the Detroit auto show about http://www.tennessean.com/article/20100111/BUSINESS/100111020/GM+considers+reopening+some+plants+–+perhaps+Spring+Hill">possibly reopening the partly idled Spring Hill assembly plant — and perhaps some other GM facilities — has sparked lots of excitement locally but doesn’t hold any concrete promises for laid-off auto workers here.

GM North American President Mark Reuss didn’t pledge a new product for Spring Hill, and his remarks to reporters on Monday should be treated with "guarded optimism," said Michael Herron, chairman of United Auto Workers Local 1853, which represents hourly workers at the Spring Hill plant.

About 1,700 http://www.tennessean.com/apps/pbcs.dll/gallery?Avis=DN&Dato=20091125&Kategori=NEWS01&Lopenr=911250806&Ref=PH">Spring Hill workers were laid off in late November when GM transferred assembly of the Chevrolet Traverse large crossover to Lansing, Mich. — where GM makes two similar models.

About 500 of the Spring Hill workers have accepted transfers to Lansing since then, and GM hired an additional 200 of its Middle Tennessee employees at other company plants, Herron said.

Still, he said it was "quite encouraging" that Reuss mentioned Spring Hill as a flexible and viable plant in remarks to journalists at Detroit’s Cobo Hall, as the 2010 North American International Auto Show got under way.

"We’ve got some plants that I’d like to allocate product to," Reuss said at the event, naming Spring Hill as a very good factory that’s versatile enough to build several GM models.

Plants making several popular new GM vehicles are operating near capacity and might need help from other company facilities, Reuss said. GM is having trouble meeting demand for some vehicles such as the Chevrolet Equinox, GMC Terrain, Cadillac SRX and Buick LaCrosse.

The Equinox and Terrain are built in Ingersoll, Ontario, Canada; the SRX is built in Ramos Arizpe, Mexico, and the LaCrosse in Kansas City, Kan.

Reuss said GM’s first step would be to try to boost production at those plants. But, if necessary, it would consider using idled plants to make more vehicles, which could mean more auto jobs being resurrected.

Leaders encouraged

Roughly 1,000 GM employees were put out of work when Spring Hill went on "standby" late last fall. Some 800 workers remain employed here, however, building engines and components for other GM vehicles, Herron said.

GM has made no commitment to restart Spring Hill’s vehicle assembly line. But local leaders were encouraged by Reuss’s comments about Spring Hill, said Brandom Gengelbach, president of the Maury Alliance, a regional economic development agency based in Columbia, Tenn., where many of GM’s idled workers live.

"There is no specific news, but the fact that he would mention Spring Hill definitely says a lot about this facility and what an asset it is to GM," Gengelbach said. "From our standpoint, we’re continuing to work with all of the parties involved to try to get this plant back on line."

http://www.tennessean.com/article/20100112/BUSINESS01/1120326">GM closed 14 plants last year as it dealt with the worst U.S. new-car sales since 1982 and a financial crisis of its own, which involved a massive federal bailout and bankruptcy reorganization.

While most of the plants were closed permanently, the Spring Hill and Janesville, Wis., facilities were placed on standby, GM said, and could be reactivated if sales improved.

Some auto industry analysts think that could come soon. Among them is Jack R. Nerad, executive market analyst for the Kelley Blue Book and kbb.com — a consumer Web site.

"Sometimes manufacturers cut production capacity too much, and this might be the case for GM," he said. "It’s not an exact science, and it might be time to bring some of that capacity back."

Signs of improvement

The market is showing signs of improvement, and any increase would be welcome, Nerad said. "What we saw in 2009 was so dreadfully awful for everybody."

Total U.S. sales for 2010 could range from 11.4 million to 12.5 million vehicles, he added — "a dreadful year in the context of 2008, but a great increase after what we saw in 2009."

In 2009, U.S. new-vehicle sales totaled 10.4 million, down from 13.2 million in 2008 and 16.1 million in ’07.

It would make sense for GM to reopen the Spring Hill plant if additional capacity were needed, Nerad said, mostly because that facility received a $700 million upgrade in 2007 to give it the flexibility to assemble almost any vehicle the company makes.

GM had only a 13-day supply of the Equinox and 18 days of the GMC Terrain at the end of December. Both crossovers are equipped with four-cylinder engines that can get up to 32 mpg on the highway.

The company has a 25-day supply of the SRX, and 54 days’ worth of the LaCrosse sedan on hand, according to Ward’s AutoInfoBank. Reuss said he would meet with GM’s manufacturing and sales executives next week to see if they could figure out how to squeeze more vehicles out of existing plants.

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