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 that the Spring Hill plant on the outskirts of Nashville will be assigned a new product before it is mothballed.
Maury County Mayor James Bailey said he was frustrated that all the work 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.
“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.
Herron said recent investments in the Spring Hill plant, which was originally built to make Saturns, approached $1 billion. GM retooled the plant to begin making the Chevrolet Traverse crossover vehicle in October, and the automaker installed a new paint shop and steel stamping operations.
“This is a site that has it all,” Herron said. “It’s the one site in America where you can come in and roll raw materials in the front door and roll finished product out the back.”
Herron said he had no information on whether the plant could be sold to companies buying the brands GM is shedding in bankruptcy protection, like Saturn or Hummer.
Tennessee has been a recent hotbed of automobile industry activity. Germany’s Volkswagen AG is building a $1 billion assembly plant in Chattanooga, and Japan’s Nissan Motor Co. this week secured a $1.6 billion federal loan to build electric cars and battery packs to power them at its Tennessee assembly complex.
In Wisconsin, officials are left to discuss options for the GM-owned plant and its 4 million square feet of space.
The plant is technically on “stand by” status and GM might bring production back in 2011 if business improves, said Douglas Venable, Janesville’s economic development director, but city officials may encourage the automaker to sell so other businesses can bring in jobs.
“The uncertainty is the difficult part,” Venable said. “At some point families have to decide what they’re going to do, if they’re going to transfer elsewhere. And the business community, it’s hard for them to make investments not knowing if GM is staying or going.”
One former autoworker, 47-year-old Vicki Sathre of Janesville, said she had hoped GM would reopen the plant but suspected the stamping facilities near the Michigan site made it a more logical choice.
Sathre, who took a $20,000 buyout in April after 12 years at the plant, said she doesn’t put much stock in GM’s claims that it might reopen the Janesville site if demand for vehicles improves.
“You can’t live on a wish and a dream,” said Sathre, who is studying to become a dental assistant.
Spring Hill officials expect about 500 of the plant’s 3,000 workers to stay on the job doing engine, stamping and plastic work after Traverse production ends around Thanksgiving.
Friday’s decision could encourage more workers to take buyout of early retirement offers by the end of next month, Herron said.
But Bernard Burns, 60, who has worked at the Spring Hill plant since 1991, said retirement isn’t an option for him. Burns said his 14-year-old son has recently undergone cancer treatments and he doesn’t want to lose his family’s health benefits.
“Hopefully I’ll have enough seniority” to remain at the plant, he said. “But you have to go where the money is.”