States Rush to Land GM’s Saturn : Site Selection for New Project Sparks Furious Lobbying

Two weeks ago ago, when Illinois Gov. James R. Thompson first read of General Motors Corp.’s plans to build a new high-tech assembly complex for its proposed Saturn small car, he immediately picked up the telephone and called GM Chairman Roger B. Smith.

Pulling Smith out of a meeting on Jan. 9, Thompson told Smith how badly he wanted the Saturn complex for Illinois. The next day, he flew to GM headquarters in Detroit for a highly publicized meeting with Saturn project chief Joseph Sanchez to extol the virtues of his state.

Afterward, Thompson sat behind the wheel of a Saturn prototype at GM’s technical center for the benefit of the camera crews from back home and told the press how Illinois’ high-tech base makes it the logical place to locate Saturn.

The day after Thompson’s visit, Michigan Gov. James J. Blanchard commuted to Detroit from the state capital in Lansing to try to make sure that Saturn was not stolen out from under him.

He met with Smith, GM President F. James McDonald and Sanchez and was reassured that, at the very least, the headquarters staff for Saturn would be based in Detroit. Blanchard also announced that he was setting up a task force in the state Commerce Department to lure the Saturn manufacturing complex to Michigan.

Later, he talked about how Michigan’s auto-supplier base makes it the logical place for Saturn. Blanchard added that Michigan “will meet or exceed any incentives offered to GM by any other state.”

But that was just the beginning.

Since Smith announced at a Jan. 8 press conference that GM will create Saturn Corp., a wholly owned subsidiary charged with the $5-billion task of developing an all-new small car for the late 1980s that will be competitive with the Japanese, and added that GM was likely to choose a Saturn plant site sometime in the next few months, politicians from virtually every industrial state in the country have been tripping over each other in their efforts to woo Saturn.

From Ohio to California, civic leaders are all dreaming about how a project such as Saturn, one that seemingly offers the best of all possible economic development worlds--high technology and thousands of high-paying blue-collar jobs--could help their states.

Saturn is expected to create 20,000 jobs, including 6,000 at its highly automated manufacturing plant, and dozens of firms supplying parts to Saturn can be expected to locate new facilities near the Saturn site.

It is no wonder, then, that Saturn has become the most sought-after industrial project in America. For a city or state seeking to renew its industrial base, Saturn could be the jewel in the crown, a project that is being touted as the model that American industry will follow in its drive to compete with the rest of the world into the 21st Century.

“We are being inundated,” GM spokesman Stan Hall says. “We are being contacted by every major state through every possible conduit. We are getting calls at our local plants, through public relations offices, through local congressional delegations, everybody. We didn’t expect this much interest.”

Hall adds that GM’s site-selection staff has already prepared an initial list of 20 potential Saturn sites around the country but that the company is not limiting its search to those on the list.

“We’ve been talking to all of the states and communities that have been contacting us,” he says.

Still, he warned Thursday that GM’s site-selection committee is beginning to lose its patience with the flood of inquiries from local officials.

There is no sign of a letup in the number of politicians making pilgrimages to Detroit, either. Even though Saturn’s Sanchez suffered an apparent heart attack Tuesday night and remains hospitalized, Ohio Gov. Richard Celeste came to Detroit on Thursday to meet with Smith, and he brought members of the Columbus press corps with him.

Indiana’s Lt. Gov. John Mutz--who, as head of the state’s economic development department is preparing a list of Indiana sites for GM’s consideration--might not be far behind.

In between governors, Rep. Richard A. Gephardt (D-Mo.) dropped in on Smith last week to tell him about the attractions of St. Louis.

Today, Missouri Gov. John Ashcroft is holding what has been billed as Missouri’s “Saturn Summit,” a meeting of 125 state labor, business and political leaders, to figure out how Missouri can win Saturn and eventually overtake Michigan as the nation’s leading car-producing state.

(Not to be outdone, Michigan’s 20-member congressional delegation has formed a “Saturn in Michigan” task force to help GM with anything in Washington that might make it easier to locate the complex in the state.)

And state officials in Illinois held meetings earlier this week with leaders from 1,100 Illinois towns interested in having the state help them bid for Saturn.

Perhaps inevitably, local politics has already become enmeshed in the recruitment drive. William Lucas, county executive for Wayne County, Mich. (which includes Detroit) and often mentioned as a possible Blanchard opponent in the 1986 Michigan gubernatorial race, offered 200 acres of free land to GM as a site for the Saturn complex on the very day that Blanchard met with Smith.

But political rival Daniel Murphy, county executive of neighboring Oakland County, dismissed Lucas’ offer, saying that GM would need much more land and adding that there is none better than the land available in his jurisdiction.

GM’s Smith appears rather amused at his sudden popularity among political leaders from both parties, and seems to be savoring the feeling of having such leverage over so many local governments in states where GM does business.

Half in jest, Smith said last week that he was toying with the idea of considering sites for Saturn only in states that have passed mandatory seat belt laws. (GM has been lobbying hard for such laws in order to avoid federal regulations requiring that all new cars be equipped with air bags or automatic seat belts by 1989.)

In fact, when Illinois’ Thompson called him to talk about Saturn, Smith congratulated the governor for pushing a mandatory seat belt law through the Illinois Legislature.

But, in the face of so much public campaigning from state officials, GM insists that it doesn’t just want tax abatements, job-training funds, industrial loans and other traditional kinds of business incentives local governments like to offer. It wants assurances of a stable business climate, as well as a commitment from local officials that they will attempt to minimize any friction between business and government.

“The Saturn has to have everything going for it that it can,” Smith says. “So the site selection, particularly since we are going to be in a new site, is going to be particularly sensitive and important.”

Perhaps more than any other state, Michigan has much to gain and even more to lose in the Saturn competition. Despite the massive layoffs and plant closings that plagued the state throughout the auto industry’s long slump, Michigan still accounts for about 30% of U.S. car production.

But if the Saturn complex locates elsewhere, it could signal the end of Michigan’s supremacy in car building.

Fresh from his meeting with GM, Blanchard acknowledged that Michigan, which has long been heavily criticized for having one of the worst business climates of any state in the nation, will have to work hard to attract Saturn.

“If we are to get Saturn, we must have a new set of attitudes from workers, managers and even the governor and state government,” Blanchard said.

Still, Michigan and other states in the industrial Midwest do appear to have a leg up on their competitors from the Sun Belt in the fight for Saturn. Officials from several states who have talked with GM executives say the company is inclined to locate the facility in the central United States in order to be near GM’s parts suppliers.

GM, which has been working closely with the United Auto Workers to develop a new consensus style of labor-management relations for Saturn, also seems eager to keep Saturn close to the large concentrations of laid-off GM workers in the Midwest, so that at least some can be rehired for the project.

But that hasn’t deterred other states, including California, from making bids. James Vaughn, director of business development for the California Department of Commerce, says he has been talking long distance with GM’s site-selection committee and is in the process of gathering information on potential California sites for GM’s consideration.

“I think California’s chances are as good as anybody else’s,” Vaughn insists.