GM’s Saturn Plant Gives Tennessee New Luster as an Industrial Power
A new industrial revolution is stirring the serenity of rural Tennessee, where grassy hills roll across land that is acquiring the unlikely nickname of Little Detroit.
Once known for hillbilly music, teen brides and smooth whiskey, Tennessee is emerging as a sophisticated industrial heavyweight--hauling in the biggest industrial catches of the decade--first, the Nissan truck plant in 1980; next, the forthcoming $3.5-billion General Motors Saturn factory.
“In Tennessee politics, we have a saying, ‘Getting the talk right,’ ” said two-term Republican Gov. Lamar Alexander. “To my way of thinking, the talk about Tennessee outside the state wasn’t right eight or 10 years ago. . . . In the past, we’ve gotten more publicity for the largest fireworks factory explosion or the biggest bank failure or the youngest teen-age wife marrying the oldest husband possible.”
GM Picks Tennessee
But all of that is quite different from General Motors picking Tennessee as the best place to put its Saturn plant just five years after Nissan picked Tennessee as the best place to put the largest Japanese investment in the United States.
“Every state can give you a good chamber of commerce speech about why it’s the best place,” Alexander said in an interview.” But all we have to say is, ‘Look where the world’s largest company made America’s biggest investment after the biggest study anybody can remember.’ ”
Capital investments for manufacturing growth in 1984 topped $1.3 billion, and more than 22,000 jobs were created by new and expanding businesses. Federal Express, Holiday Inns, Hospital Corp. of America and Nissan are only a few of the 100 firms that have corporate headquarters in the state. American Airlines has announced plans to establish a major air hub at Nashville.
It’s not surprising that Tennessee jumped to 10th place this year in the respected Alexander Grant & Co. study evaluating states offering the best manufacturing climates in America. Hottest of all is lush Middle Tennessee--the Nashville area--where Nissan set up its pickup truck and small-car plant in Smyrna and where Saturn landed in Spring Hill in July after months of courting by hundreds of other towns in other states.
There is talk that Toyota will follow its competitors and build a major plant nearby. Toyota officials say only that they are looking for a site for a $500-million assembly plant and will announce a decision by November. But published reports indicate that Toyota has narrowed the field to Lebanon, Tenn.--just east of Nashville--and Kansas City, Kan.
Better Shot Now
“The general feeling here is we’ve got a better shot now at Toyota than we did because of the Saturn thing,” said Tony Spiva, an economics professor at the University of Tennessee in Knoxville. “There’s bound to be a ripple effect. In another couple of years we could end up as a major automotive state.”
Middle Tennessee’s rise was generated by a number of major assets, from convenience of location to lack of strong unions:
- Nashville, within a day’s drive of 76% of the U.S. population, is served by three interstate highways.
- Memphis sits 200 miles away with the nation’s second-largest inland port on the Mississippi, and the new Tennessee-Tombigbee Waterway connects the Gulf of Mexico and the Tennessee River, which runs west of Nashville.
- Tennessee is eager to tell manufacturers that its 5.9% union membership is lower than the national average, although the United Auto Workers will fully represent Saturn employees.
- Worker productivity is higher than the national average.
- There is no personal income tax, the sales tax on industrial machinery was phased out in 1983 and an investment-tax credit of 1% for machinery took effect last year.
- The Tennessee Valley Authority, the world’s largest electric utility, provides cheap and abundant power in seven states.
As for employee happiness, Tennessee enjoys a relatively mild year-round climate. The Legislature is providing money to beef up schools and has developed a merit-pay plan for teachers.
And, perhaps most important, there is Gov. Alexander, whom William Long, commissioner of the state Department of Economic and Community Development, calls “the best salesman in America.” Said Long of Alexander: “He has the ability to analyze what a company needs and come up with solutions better than anyone I’ve ever seen.”
Map of State
In the state Capitol, Alexander proudly points to a wall in his office where there hangs a map of Tennessee full of red pins representing the big cities and tiny towns--500 of them--celebrating Tennessee Homecoming ’86. Minnie Pearl and Alex Haley are directing the affair, which will give thousands of Tennesseans and former Tennesseans the chance to trace their roots and return for a reunion.
“We will be celebrating the very values that helped bring Saturn here,” said Alexander, a seventh-generation East Tennessean.
At the same time, Alexander and Tennessee continue to recruit hard. Within days of Saturn’s announcement, Alexander wrote an open letter to the nation that appeared as a full-page advertisement in several national newspapers espousing the merits of the state.
“We just want to get people thinking about Tennessee,” Alexander said. “Now’s the time. When you have opportunities, you take them.”
But that is not his only priority.
“My major goal for the state for my remaining time as governor is to keep yesterday’s values while we’re getting tomorrow’s jobs,” said Alexander, whose term ends next year. “We’re dead serious about that.
“How do we fit all this into the landscape without changing the landscape too much--that’s our greatest challenge,” he said.
Financial Incentives
In quest of Saturn, some states erected billboards in downtown Detroit and others sent celebrities to woo GM executives, while Tennessee worked quietly. Alexander and former Sen. Howard Baker each talked twice with GM Chairman Roger Smith. Tennessee’s constitution prohibits the state from giving financial incentives to companies, but the men stressed a generally pro-business attitude and filled GM computers with facts and figures about Tennessee.
“Then we tried to think of one idea that might separate Tennessee from the other five or six states in contention,” Alexander said. “And that was, if they really wanted to compete with the Japanese, they couldn’t afford to pass up the environment that had made Nissan so successful.
“At first, they were repelled by the idea of being in the same place with Nissan. So we tried to turn it into an asset. It then became a hook, instead of a kiss of death.”
The strategy obviously worked. “I liked the more businesslike approach,” said Stan Hall, a GM spokesman in Detroit. “They were very skillful. They didn’t send any delegations up here with bells and whistles, but they let us know in a very businesslike manner that they were interested.”
Alexander spent many of his first months in office building relations between Japan and Tennessee and has made eight trips to Japan as governor. The time investment has paid off handsomely as Tennessee has 10%--$1.2 billion--of all the Japanese capital invested in the United States.
Besides Nissan, which set up shop in Smyrna, 15 miles east of Nashville, other Japanese firms came to Tennessee to make tires, electronics and assorted other goods.
“One senior Nissan official was in the governor’s residence 11 times in the first two years I was in office, which was more often than my own parents,” Alexander says. “I came home from the Republican convention and canceled a meeting with Ronald Reagan so I could have lunch with the president of Nissan. . . .
“We try to make the Japanese feel at home, and Tennessee is very much like Japan. The cherry blossoms bloom there when the dogwoods bloom here; the maple leaf turns red in October outside Tokyo when they turn red in the Smoky Mountains.”
Apprehension Felt
But cars--not trees--were Nissan’s business, and there was apprehension about dropping a major manufacturing plant smack-dab in the middle of Tennessee.
“A lot of us had some reservations about starting a plant where there were virtually no automotive skills,” said Larry Seltz, director of personnel development for Nissan in Smyrna, and a 22-year Ford Motor veteran. “But what we found was a very committed kind of a work force. We found the kinds of basic abilities and commitment we needed to start with. From there, we were able to train people to do the jobs well.”
One Nissan study revealed that the trucks built at the Smyrna plant had 11% fewer defects after being on the road three months than models assembled in Japan.
While Nissan put Tennessee in gear, Saturn revved up the state’s engines to a roar. It was a giant coup for Tennessee and tiny Spring Hill, which sits 30 miles south of Nashville, to land Saturn after the most ballyhooed search for an industrial site that anyone can remember.
Saturn is not just another plant. The future of GM might be on the line.
The sub-compact cars will become GM’s sixth nameplate, the first since Chevrolet in 1918. The factory will employ a team approach to auto manufacturing, taking a page from the book of their chief competitors, the Japanese, and taking a step back from the old-style assembly line.
Unique Agreement
Because of a unique agreement reached between GM and the United Auto Workers executive committee, workers will play a greater role in management--as they have done with great success at the nearby Nissan plant. Production employees will receive a salary instead of an hourly wage, and pay increases will be tied to performance. There will be no time clocks in the plant, but job-security provisions are only somewhat less comprehensive than in Detroit.
“We’re investing a hell of a lot in this thing. I think maybe we’re investing our future,” says GM’s Hall.
Exactly how a $3.5-billion automobile plant with 6,000 employees and a $200-million payroll could wind up in Spring Hill--a picturesque town with two traffic lights and a population of 1,200 some 500 miles south Detroit--still boggles the minds of Spring Hill residents.
“I just don’t know how General Motors even found Spring Hill,” said Randy Lochridge, a sixth-generation farmer whose family owns more than 400 acres near the proposed Saturn plant. “It’s not even on some maps. I guess it’s on all the maps now.”
Spring Hill is Cinderella to its larger neighbors--Columbia and Franklin--that paid it little attention over the years. Basically a farming community, Spring Hill could be Anytown, U.S.A., with its tree-lined streets, tidy frame houses and easy-going pace. Two police officers keep the peace, and many folks have trouble recalling the last time a crime was committed. It is rich in Civil War history, and President James Polk’s home still stands down the road in Columbia, “Mule Capital of the World.”
Southern-Style Mansion
Hunting and fishing in Maury County--the locals pronounce it Murray--is supreme from quail to deer to bass.
Perhaps the best-known Spring Hill landmark is the Southern-style mansion on Haynes Haven plantation, an 1,800-acre farm that is the centerpiece of the land where GM plans to build the Saturn plant. GM executives promised to spare, even restore, the mansion and another antebellum home nearby.
Saturn has dominated talk at Spring Hill’s only two restaurants, and the entire town is caught up in a flurry of activity. “Welcome Saturn” signs decorate Spring Hill businesses. “Saturn Has Landed” T-shirts and baseball caps became the rage.
“For Sale” signs sprouted all over town. Land speculators and real-estate agents swarmed Spring Hill, looking for a fast buck or an honest dollar. Douglas Pratt, of McArthur-Sanders Realty in Franklin, said prime property in Spring Hill that sold for $1,000 an acre six months ago now fetches $10,000.
“I feel like land prices are going to level off before long,” Pratt said. “But right now, the sky’s the limit.”
Residents Stunned
The whole thing has stunned residents. Unemployment in Maury County has been high--it soared above 20% several years ago--and still hovers near 9%.
“The GM people have been extremely nice,” said Toby Smith, who works at Early’s Honey Stand. “I think this is going to be very good for the town.”
“One thing that might be bad,” says Teresa Holt, who works at a shop in Spring Hill, “is that a lot of people moved here to live in the country. Five years from now, this isn’t going to be country any more.”
GM officials vow to have as little impact as possible on Spring Hill and its surrounding countryside. “Spring Hill is a lovely part of the world,” says William Hoglund, president of Saturn, “and we’re not going to rape the land with smoke-stack factories.”
Minimal Impact
Nissan has had minimal impact on Smyrna, but it is a town large enough to supply most of the plant’s 3,000 employees. In contrast, GM will bring an unspecified number of United Auto Workers from Detroit, so there will be plenty of new homes, apartments, convenience stores and fast-food restaurants springing up around Spring Hill.
Experts predict that Saturn will generate 20,000 supplier jobs in Middle Tennessee by the time the plant opens and starts cranking out 500,000 cars a year by 1988.
In fact, no one--not even GM--knows exactly how many of the estimated 6,000 Saturn jobs will go to Tennesseans, but the feeling is that other plants drawn to the area would create more jobs anyway. GM officials have assured area residents they will get first crack at most of the 4,000 construction jobs for the Saturn plant when building starts later this year.
One thing seems certain: Spring Hill’s bucolic scenery is in for some changes. Sighs Graham Kennedy, who left Atlanta for the quiet of Spring Hill 11 years ago: “For some reason, I just can’t picture a McDonald’s in Spring Hill.”
