Shipping Costs Key in Deciding on Saturn Site : GM Says Spring Hill’s Central Location Vital

The cost of transporting cars from the factory to the marketplace was the single biggest factor that General Motors studied in deciding where to locate its huge Saturn assembly complex, Saturn’s president said here Tuesday.

As a result, GM chose Spring Hill, Tenn., over more than 1,000 other locations around the country as the site for its Saturn plant largely because of Tennessee’s central location within 500 miles of nearly 80% of the nation’s population--and the market for Saturn’s subcompact cars--William E. Hoglund said at a news conference.

Hoglund also noted that the nation’s population shift from the Northeast to the Southwest has given Tennessee and other Southern states located near the new center of the nation’s population base (and at the heart of the auto market) a big advantage in the competition for future automobile assembly plants.

Nissan Plant Nearby

That population shift “changes distribution patterns and moves the geographic center for shipping automobiles down toward the Southwest, and that has created a renewed interest (among industry executives) in shifting car production from the Midwest to the South,” Hoglund said.

In fact, Tennessee is rapidly becoming a major presence in domestic car production. Along with Saturn, Nissan has already built a car and truck assembly plant in Smyrna, Tenn., 45 miles from Spring Hill, and Toyota is reportedly considering building its first American car plant in the state as well.

Stan Hall, a GM spokesman, added that the cost of transporting Saturn’s cars to dealers was about twice as important in the site selection decision as the cost of shipping parts into the Saturn complex, since so many parts will actually be built at the complex itself.

Saturn is GM’s all-out, $5-billion effort to produce small cars in this country by the end of the decade that are cost-competitive with the Japanese.

Saturn, an independent GM subsidiary and the first new domestic passenger car division to be created by GM since 1918, eventually plans to build up to 500,000 small cars a year at the $3.5-billion Spring Hill complex.

Production May Start in 1989

Hoglund said Saturn will break ground on the site at Spring Hill, about 30 miles south of Nashville, within six to eight months, but he didn’t say when car production is scheduled to begin.

However, he added that the plant’s construction will be completed within 2 1/2 to three years after ground is broken, which means that car production is likely to begin in late 1988 or 1989.

Saturn officials said here Tuesday that, in addition to a final car assembly operation, its big manufacturing complex will house engine and transmission assembly operations, a foundry for manufacturing engine and transmission components, a metal stamping plant and a components facility that will probably make plastic parts.

The Spring Hill complex will employ a total of 6,000 workers on two shifts, Saturn officials say.