GM To Build Chevy Equinox In Tennessee

By Michelle Krebs November 21, 2011

11 Chevy Equinox 2.jpg

General Motors Co. will restart vehicle assembly at its Spring Hill, Tenn., plant to build its hot-selling Chevrolet Equinox crossover. The Equinox currently is built only in Oshawa, Ontario, Canada, alongside its equally fast-selling GMC Terrain, but sales have outstripped the automaker’s ability to produce the vehicles. Through October, sales of the Equinox are up 23 percent for the year to date compared with the same period in 2010; Terrain sales are up 21 percent. Edmunds.com calculates the days-to-turn – the number of days from the vehicle being delivered to the dealership to being purchased by a consumer – is a meager 20 days for the Equinox and 24 days for the Terrain. Tennessee production of the Equinox begins in the second half of 2012.

The re-opening of Spring Hill’s vehicle assembly operations to produce the Equinox represents a $61-million investment by GM and will create 685 jobs. In addition to Equinox production, GM reiterated Monday at a ceremony attended by GM executives and United Auto Workers (UAW) union officials as well as Tennessee Gov. Bill Haslam that a midsize model, details of which were not revealed, will go into the Spring Hill plant in 2014 as a 2015 model. This second phase of Spring Hill’s revival will represent a $183-million investment by GM and create another 1,200 jobs. By the beginning of December, GM will have rehired all its eligible formerly laid-off workers, a large proportion of the new jobs at the Spring Hill plant will be new hires paid the lower Tier 2 wage allowed under the 2011 UAW-GM labor contract.

112111 GM SUVs vs Comp 2.jpgThe Equinox will be produced in a flexible-manufacturing “cell” that allows GM to build a variety of models on a variety of platforms to meet needed volumes when new models are launched – or to allow for production of a current model to continue while the vehicle’s “home” plant is being retooled to build the next generation of that vehicle. “Spring Hill has a history as one of GM’s most innovative and flexible plants,” said Cathy Clegg, vice president of GM Labor Relations. “We’re pleased that, working together with the UAW, we were able to build on that history and develop a plan to resume production at Spring Hill.”

The potential for Spring Hill’s future role was discussed as a part of negotiations for a four-year national labor agreement ratified in October. "Our number one priority in auto negotiations this year was jobs," said UAW President Bob King. "We asked the company to bring jobs back to America, and that’s what this collective bargaining agreement represents. Together, we are bringing 1,800 jobs to Tennessee, and a total of 6,400 new GM jobs, which translates to nearly 60,000 good, auto-related jobs in the United States." GM Spring Hill plant line.jpg

GM had exhausted other methods to eke out more Equinox and Terrain volume. Originally, GM had planned 200,000 units of annual capacity for the two crossovers combined, but demand doubled. GM added a third shift at its Canadian plant that boosted capacity by 60,000 units. Increasing productivity, clearing bottlenecks and generally running faster generated another 50,000 units of capacity, Diana Tremblay, GM’s head of global manufacturing, noted last summer in a presentation to analysts. Another 25,000 units of capacity came from booking overtime. GM went another step by using excess capacity at its CAMI plant – a joint-venture operation with Suzuki Motors Corp. in Canada – to make the bodies of the Equinox and Terrain that were then trucked to the nearby Oshawa plant for final assembly. The so-called “Oshawa shuttle” added another 60,000 units of capacity in only a few months time, Tremblay said. GM will maintain the Oshawa shuttle and, with the addition of Equinox production in Tennessee, the plant in Canada now has more capacity to build the Terrain.

Mothballed in late 2009, GM’s Spring Hill plant opened in 1990 to exclusively build Saturn cars – then the Saturn Vue crossover – with workers covered by a special labor contract. It built its last Saturn in March 2007 and switched briefly to production of the Chevrolet Traverse fullsize crossover, which eventually was moved out of Tennessee to Lansing, Mich. The Saturn division was eliminated during GM’s Chapter 11 bankruptcy after the proposed sale of the division to Penske Automotive failed in the eleventh hour. Since then, parts of the plant have re-opened, including powertrain operations where 4-cylinder engines are built, the stamping plant and some operations to make interior components. These re-openings brought back about 1,250 jobs.

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