GM CEO: Spring Hill may get Equinox and Terrain

GM CEO: Spring Hill may get Equinox and Terrain
Mike Colias
Automotive News | October 17, 2011 – 12:01 am EST

DETROIT — General Motors plans to shift some production of its Chevrolet Equinox and GMC Terrain from the factories that now assemble the popular crossovers to another plant to alleviate tight supplies, CEO Dan Akerson told Automotive News.

Akerson said GM is considering its former Saturn plant in Spring Hill, Tenn., to take on added production of the crossovers, which are now made at the automaker’s plants in Ingersoll and Oshawa, Ontario.

Akerson also said GM is considering options for extra production of its hot-selling Cruze compact. The car is made at GM’s Lordstown, Ohio, plant, which has been running three shifts and Saturday overtime shifts.

Akerson did not say which plant could get the added Cruze production. GM officials previously have said that its Lake Orion assembly plant in suburban Detroit would be the overflow plant for the Cruze.

The two Canadian-built crossovers have been in short supply since hitting the market two years ago. GM has boosted production five times to squeeze more of the crossovers out of the CAMI Automotive Inc. plant in Ingersoll, which makes most of the vehicles.

In September 2010, it took the unusual step of transporting Equinox bodies built at CAMI about 125 miles to Oshawa for final assembly.

Akerson said that arrangement has been an effective stopgap, but it’s not a permanent solution.

‘Fix that’

Sales of the Cruze compact are so strong that General Motors is considering options for extra production.

“We’ve got to fix that. We can’t run like that forever,” Akerson said. “We’ve got to bring it to other plants” within the next 12 to 24 months, he said. “We’ve looked at Spring Hill and we’ve looked at other plants, too.”

Akerson’s comments are GM’s first in public about what might be assembled at Spring Hill since the plant emerged as a centerpiece of the company’s new four-year labor contract approved by UAW workers last month. The union said GM agreed to spend $419 million and add about 1,700 jobs at Spring Hill to build two “mid-sized vehicles.”

Akerson said that GM likely would use Spring Hill as a spillover plant to produce various high-demand vehicles. Idled in 2009 amid GM’s bankruptcy restructuring, the facility is one of GM’s most technologically advanced factories.

“If we open Spring Hill, we’re not going to go in there and say ‘We’re going to produce a couple hundred thousand of one [vehicle] in there,'” Akerson said. “It’ll be because we go in and produce 50,000 of this, 25,000 of that.”

Canadian Auto Workers President Ken Lewenza said GM officials have not confirmed whether they plan to produce some crossovers at Spring Hill. He said he would like assurances that, if GM sends production elsewhere and demand for the crossovers later drops, output would be curtailed at the overflow plant, and not the Canadian facilities.

‘Underflow plant’

“I totally get the idea of overflow and absorbing whatever sales you can absorb,” Lewenza said. “But at the end of the day, if you call it an overflow plant, then you also have to call it an underflow plant if the volumes don’t dictate it.”

Last month, GM CFO Dan Ammann said Spring Hill will operate “under an innovative operating and staffing agreement” that maximizes its flexibility.

The Equinox and Terrain are among the fastest-selling vehicles in GM’s lineup. Through September of this year, Equinox sales rose 46 percent from the year-earlier period to 145,035, while Terrain sales rose 59 percent to 63,451.

As of Oct. 1, GM had a 35-day supply of the Equinox and a 49-day supply of the Terrain — two of the thinnest stocks among GM’s high-volume vehicles.

The Equinox is among General Motors’ top sellers, with U.S. sales up 46 percent this year through September.

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