GM picks Michigan over Spring Hill

GM picks Michigan over Spring Hill
2,500 Tenn. workers had hoped to build small car
By Bonna Johnson • THE TENNESSEAN • June 26, 2009

A decision by General Motors to build a new small-car line in Michigan has disappointed Spring Hill workers and leaders, but they are holding out hope that GM — or another manufacturer — will not forget them.

"There's a lot of sadness, some anger," said Michele Burley, 50, who has worked for GM for 28 years. "But we still have a chance of getting something else, maybe just not right away."

General Motors is expected to formally announce today it has selected a plant in Orion Township, Mich., dashing the hopes of some 2,500 Spring Hill workers who are facing layoffs, buyouts and early retirements at the factory GM plans to idle later this year.

"It's disappointing news that GM has not chosen this plant," said state Rep. Ty Cobb, a Democrat representing Spring Hill, who confirmed GM's intentions to The Tennessean on Thursday.

"But I think we're still in the running for something," Cobb said. "Long term, good things will happen at this site."

Many auto analysts believed that Spring Hill was the most logical selection. Built with great fanfare in the late 1980s to manufacture Saturn cars, the plant recently underwent a $600 million retooling to build the new Chevrolet Traverse.

But politics could have played a part in the decision, especially after Tennessee Sen. Bob Corker initially fought the bailout of the auto industry and Gov. Phil Bredesen caused a stir when he publicly complained that GM wanted at least $200 million to locate the small car line here.

Michigan politicians, meanwhile, strongly lobbied for the plant, going so far as to submit petitions with 20,000 signatures. They argued their state needed more help because seven of the 14 plants targeted for closure in the automaker's bankruptcy were in Michigan.

"Tennessee didn't want to play, and that left the field open," said Jeremy Anwyl, CEO of Edmunds.com.

And just because Spring Hill lost this round, that's not to say GM will necessarily shutter the plant, one of the newest it owns, or sell it.

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The Spring Hill plant has a skilled work force, a desirable location, was recently modernized and is in a region with a growing auto industry, said David Cole, chairman of the Center for Automotive Research. "When the market takes off, they could have it ready to go," Cole said.



Announcement today
Local labor and political leaders are scheduled to hold a 10:30 a.m. news conference today at the UAW hall in Spring Hill to discuss the plant's future.

On Thursday afternoon, GM spokesman Chris Lee said officials had nothing to announce. Bredesen's office said it had not received official word of GM's decision. And leaders of UAW Local 1853, which represents GM's Spring Hill workers, declined to comment until an official announcement is made today.

"All we have to go on is the assumption that it's still part of GM's long-range business plan," said Frank Tamberrino, president of the regional economic development group Maury Alliance. "I've said all along, rightly or wrongly, GM will need capacity when the market picks back up."

If that were to happen, Spring Hill could be up and running in the next 12 months, compared to the two years it will take GM to begin production on the new small car, Tamberrino noted.

"I think we all have to accept there may be some unknowns for a while at this plant," he said.

Michigan, Tennessee and Wisconsin, which has a closed GM plant in Janesville, all offered incentive packages to GM in an effort to lure the small-car line. The automaker had planned to produce up to 51,000 subcompacts per year in China and ship them to the U.S. starting in 2011 but later agreed to build the three-door hatchback in the U.S.

Earlier Thursday, Bredesen spoke about Spring Hill's future when he told reporters that Tennessee submitted the best bid possible. One problem, he noted, was that the supply chain for the small car's parts did not exist in Tennessee.

"I think there still is a very bright future for the Spring Hill plant," Bredesen said. "It's a very attractive plant in a host of ways, and we're going to keep pushing forward. … As the car market comes back, there are going to be a lot of needs for new capacity."

The governor added, "You don't win them all."

State Rep. Cobb said he understands why Michigan-based GM put the jobs on its home turf. In the end, he doesn't believe Tennessee's lack of incentives had anything to do with losing the deal. "I guess they felt it was better to have it there locally," he said.

All Cobb can do now is make sure Spring Hill workers get some job training to find new work. "People are upset with the news," said Cobb, noting that many families face tough decisions, especially if they have set roots in Tennessee and have spouses with good jobs here. "But I feel good about this plant."