GM Picks Tennessee Town for Saturn Assembly Plant
General Motors Corp. said Friday that it will locate its $3.5-billion Saturn small car assembly complex near tiny Spring Hill, Tenn., thus bringing to a close one of the most intense competitions for an industrial site ever mounted.
Saturn, touted by GM as the company’s last-ditch effort to compete profitably against Japanese-built small cars, had been wooed by virtually every major state, including California, because of its potential importance as a model that other U.S. manufacturers may follow in competing with cheaper imports from around the world.
Additionally, local politicians in communities around the nation sought Saturn because it is expected to create a total of 20,000 jobs, including 6,000 at a highly automated assembly complex, and thousands more at supplier firms that are expected to locate near the plant.
Eventually, GM’s Saturn unit will make up to 500,000 small cars a year, to be sold through a new network of dealers nationwide.
The informal announcement by GM officials--the company said it will hold a formal press conference in Nashville, 30 miles north of Spring Hill, next Tuesday--did not offer an in-depth explanation of why the giant auto maker selected the Tennessee site over the hundreds of others it had studied.
Earlier this week, industry sources said that GM had narrowed the choice to three sites: Spring Hill, Shelbyville, Ky., and Kalamazoo, Mich. California officials had previously acknowledged that the state was out of the running, apparently because GM wanted the Saturn plant near its Midwest base of operations.
The Spring Hill site is not far from an assembly plant opened last year by Japanese auto maker Nissan Corp. in Smyrna, Tenn.
GM’s confirmation that Spring Hill had been selected came just hours after the leadership of the United Auto Workers approved a novel labor agreement for the Saturn work force that calls for incentive-based pay, job security guarantees and a degree of worker-involvement in the plant’s decision-making process that is unheard of in traditional American auto plants.
In a Chicago press conference, UAW President Owen Bieber said that the union agreed to the contract, which includes a number of major concessions, to ensure that the domestic companies continue to build small cars in the United States with unionized workers.
“The UAW undertook these negotiations to create U.S. jobs by maintaining and expanding domestic small car production and to ensure the living standards of our members employed building those cars,” Bieber said.
Warning on Precedent
But he warned that the union will not allow its Saturn accord to set the pattern for its nationwide contracts with GM, Ford Motor Co. and Chrysler Corp. However, he suggested that it could be a model for any future negotiations with similar special small car projects now in the works at Ford and Chrysler.
“This agreement was tailored for a unique kind of operation the likes of which we don’t have today--the whole thing is brand new,” Bieber said.
GM said that the Saturn complex will be built on more than 2,000 acres on the south side of Spring Hill, a town with a population of only 1,200. GM refused to say when the complex will be completed, but production of Saturn cars is expected to begin in 1988 or 1989.
Despite the nationwide bidding for the project, GM officials said Friday that the company obtained only “routine” incentives from state officials, including employee training funds. But an official added that, because Saturn will so completely dominate the small Spring Hill community, GM plans to work with local officials to “make sure that we are not paying an inordinate amount of local taxes.”
GM also hopes to speed up the permit process for the plant, to shorten its construction timetable.
Workers to Be Transferred
And although Saturn will be an economic boon for the area, many of the assembly-line jobs are not expected to go to local residents. GM and the UAW have agreed that most of the work force will be made up of active and laid-off GM workers, who will be recruited and transferred to Spring Hill.
Inside the plant, GM will use the latest in robotics and other computer-aided manufacturing technology, hoping to make a leap forward in the way it builds cars.
By starting from scratch with a new division, GM hopes to eliminate the $1,500 to $2,500 per-car cost advantage it claims that the Japanese enjoy in small car production. To do so, Saturn will need to improve productivity by developing a system that ties all major administrative and shop-floor manufacturing operations into a central computer controlling the flow and organization of workers, automated machines and material throughout the plant.
Help From New Acquisition
GM is counting on the resources of Dallas-based Electronic Data Systems, its newly acquired computer services subsidiary, to accomplish that huge feat.
Saturn also plans to use the Japanese-style “team” concept with its workers in an effort to break down barriers between management and labor in the plant.
Donald Ephlin, a UAW vice president and director of the union’s GM Department, stressed Friday that workers will have a voice in every major decision at the plant. The union will also maintain some independent control over grievance procedures at the plant, despite Saturn’s new emphasis on joint management-union problem-solving, Bieber and Ephlin said.
“We’re not giving up on traditional unionism in this agreement,” Ephlin said. “We are actually accomplishing a number of early union goals here, like providing the workers with a role in decision making.”
Residents of Spring Hill were abuzz after hearing the news about Saturn. Part IV, Page 1.
