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GM Spring Hill to close

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GM this morning announced that five plants would be closing, including the Saturn plant in Spring Hill.

That's quite a shock. I always figured Saturn was sort of sacrosanct.

Since European and Asian carmakers seem to be sprouting like weeds in the South, I wonder if one of those would take over the facility? I'm totally ignorant as to whether one facility is easily adaptable to another.

Let's hope something high-wage goes in there, because those kinds of good jobs are hard to come by.

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According to the article I read GM will only be closing one line at the Saturn Plant in Spring Hill and eliminate about 1,500 of the 5,700 jobs there. If thats true thats good news in that it won't be closing the plant and firing all of the workers. However if GM has to make even more cuts in the future I'd say the Spring Hill Plant will be the first to go.

If it were to completely close the Spring Hill Plant GM would most likely hold onto it and perhaps bring it back online sometime in the future if it can get its problems sorted out. I suppose there is also the possibility it would sell the plant. It built it around 20 years ago at a cost of about 3.5 billion.

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Spring Hill, Tenn., Plant/Line No. 1, will cease production at the end of 2006

What does this mean?

Does it mean that Spring Hill will be scaling back but not shutting the doors?

Lets all hope that it

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I was listening to a radio program last week on WLAC and they said GM owes almost 90 billion to creditors and 70 billion to the emplooyee retirement plan. I think I heard the numbers right. The report also said they had 35 billion in cash reserves but that is a drop in the bucket compared to what they owe. They also stated that if GM went bankrupt that it would hit the entire economy really hard in all sectors. This is going to hit the economy in Spring Hill really hard and it will ripple all thru the Nashville area.

This is really bad news for Middle TN and the nation.

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Yes it is bad news all around. Although, it was heading this way for fifteen years or so.

So much ink has been spilled in telling the story of GM's woes. It has had its hands tied for twenty years with its extremely restrictive labor contracts compared to manufacturers overseas. This was the major reason why the company didn't discourage unionization at Spring Hill. It's also why the plant was no more cost effective than the other plans and why production was eventually shifted to Delaware. Many "experts" say that bankruptcy is the only way out of their contractual obligations for retiree healthcare (I'm not familiar enough to know if this is true or not).

I'm 36 and old enough to remember when GM first announced Saturn. It was supposed to be a completely separate company. I don't remember the specifics of that plan, and I realize that strategies must change over two decades. But it seems to me that GM never let Saturn become what it was supposed to be (a uniquely American import fighter). Meantime the imports got better and better (and better looking), while Saturn sputtered out of the gate (due mainly to its being brought back into the GM fold).

Overall, GM played the game too conservatively with bland designs and too much reliance on their SUVs. Now those decisions have caught up with them. I wish them well, but they need to prepare to become the 3rd or 4th automaker in the world. I do expect some federal help a'la Chrysler in the eighties.

How the mighty have fallen (even if they don't go bankrupt). I remember that nearly all states in the Eastern USA were competing for this plant. It was a huge deal. No doubt, it put Spring Hill on the map.

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Nissan is expected to bring 1,300 jobs to the area at about the same time this line will stop. I think this will greatly lessen the impact on the Nashville market as a whole. However, this doesn't make things better for Spring Hill and Maury/Williamson Counties. The only good part of this is that it happens in one of the state's fastest growing counties and the state's fastest growing city. There will be short-term (though lower paying) jobs available to many and hopefully with the city's otherwise bright economic picture another new employer can move in soon.

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It would make sense they wouldn't close the plant, considering how new the whole complex is. As for the Doraville GA plant, it is rather old - most in Atlanta have expected it to eventually close just as Ford's Hapeville plant would.

But at least I would think if there was any future consolidation of plants - they would choose the Spring Hill plant due to it's modernity.

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My understanding is that its the Ion line that is closing, and the other line(s) are to remain open. I think they make a SUV there too, no?

I think GM's main problem was not union contracts, which are hindersome, but that they have several name lines that make very similar cars. They make/made way to many lines of vehicles of virtually the same model, heck some were basically just different grill and guage packages; instead of focusing on quality lines that could compete with the import car market. Their over-reliance of SUV's is also a major factor.

I think bad times lie ahead for the economy in the near term. The market bets GM is going to go bankrupt in 6-12 months. If that holds true then even if they restructure and shut a third of their plants down it will be a huge economic bump for the entire economy. Not just assembly plants will be impacted, but support plants, tool and die shops, shipping companies, etc all will take a major hit if they do business with GM.

My hope is that the Japanese, Korean, and European firms in the coming years can help mediate that impact in our automotive sector.

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I think GM's main problem was not union contracts, which are hindersome, but that they have several name lines that make very similar cars. They make/made way to many lines of vehicles of virtually the same model, heck some were basically just different grill and guage packages; instead of focusing on quality lines that could compete with the import car market. Their over-reliance of SUV's is also a major factor.

The blame runs from top to bottom. Watching CNBC in my office all morning, the analysts agree to a man/woman that their largest problem is their legacy contracts with the UAW.

Many things over the last 30 years have contributed to GM's demise besides the persistence of antagonistic line-management relations. There were other factors besides their outdated model of production. First, with the rise in more Federal regulation in the late 1960's and 1970's, American auto companies were gradually taken over by their bean counters, whereas before then, there was a harmonious balance of finance/design/marketing collaboration at the top... not to mention a healthy dose of sibling rivalry between the different brands. This was a reaction meant for survival in the wake of tightening CAFE standards and safety regs. It's also true that their problems can be traced back to their merging of all car brand divisions in 1984 to just three: Buick-Oldsmobile-Cadillac, Chevy-Pontiac, and Truck Group. Of course, Saturn came along later. Unfortunately, the design folks never got their influence completely back at GM (Ford and Chrysler did a little better).

I agree totally about their bland, indistinguishable designs (To wit: Chevy and the lame Impala, but the 'Vette isn't bad).

I think bad times lie ahead for the economy in the near term. The market bets GM is going to go bankrupt in 6-12 months. If that holds true then even if they restructure and shut a third of their plants down it will be a huge economic bump for the entire economy. Not just assembly plants will be impacted, but support plants, tool and die shops, shipping companies, etc all will take a major hit if they do business with GM.

My hope is that the Japanese, Korean, and European firms in the coming years can help mediate that impact in our automotive sector.

I'm not quite as pessimistic as you on the economy, RK. GM will probably have to reorganize. True about the possibility of a big bump. Already, their announced jobs cut will number 36K.

It's entirely possible that the domestics are obsolete. The foreign plants in the US are not unionized, and yet they blow the domestics away in quality. As such, maybe GM has outlived its place in the market and is in the tail of its life-cycle a'la Nash, Packard, Studebaker, American Motors/Jeep, et.al.

Finally, on a very personal note, I couldn't see myself buying a GM product b/c their cars just look cheap with so much plastic cladding. Plus, I resent their overengineering the cars with little annoying things like the car door locks that go down when you reach about 20 mph, and the daytime running lights. Let me drive the darn thing, please.

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Plus, I resent their overengineering the cars with little annoying things like the car door locks that go down when you reach about 20 mph, and the daytime running lights. Let me drive the darn thing, please.

Most high end european and japanese cars have these features as they are considered safety items. At least on my GM vehicle, they can be easily programmed to not turn on if that is your desire. That was probably being a little unfair to GM.

Now in GM's defense,

We own two late model Mercedes-Benz vehicles and a Chevy Tahoe. By far, and without any doubt, the Tahoe has been the most trouble free of the lot, it is easy to drive, runs on regular gas and it requires very little maintenance. And it's foreign competion in the same class, the Toyota Sequoia and Nissan Armada, still don't measure up. The Sequoia is not powerful enough to pull our boat (which is the reason for owning something this large) and the Armada/Titan's 8 cyl runs like a tank engine, very rough and it gets really bad gas mileage too. In conparison the Chevy engine runs silky smooth, has plenty of power, and unlike its Japanese counterparts, is engineered as a Flex Fuel vehicle which means we can run it on renewable E85 instead of gasoline.

The Toyota and Nissan trucks look good on paper, but go test drive them and there are a lot of annoying things about them that turn people off. I have no doubt they will eventually catch up but the point here is that GM is more than capiable of building a well built, well engineered vehicle. But this really isn't GM's problem.

GM's biggest problem is its incompetant and arrogant management. While GM's unionized contracts are a big problem for it, its management has consistantly made bad decisions as they are only interested in the short term and don't take the longer view hat you see Toyota and Nissan taking. They have consistantly misjudged the market and it has gotten them in a lot of trouble. The one bright spot that GM had in the last couple of decades, Saturn, has been destroyed by the same bungling management which has completly thrown away the mind share generated by Saturn when it was first created.

What you are seeing now is a company whose cash cow, big trucks, dry up as gasoline has gotten more expensive. Toyota, Honda and to a lesser extent Nissan are going to clean their clock again, just as they did in the 70's when we had the oil shocks.

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Most high end european and japanese cars have these features as they are considered safety items. At least on my GM vehicle, they can be easily programmed to not turn on if that is your desire. That was probably being a little unfair to GM.

Now in GM's defense,

We own two late model Mercedes-Benz vehicles and a Chevy Tahoe. By far, and without any doubt, the Tahoe has been the most trouble free of the lot, it is easy to drive, runs on regular gas and it requires very little maintenance. And it's foreign competion in the same class, the Toyota Sequoia and Nissan Armada, still don't measure up. The Sequoia is not powerful enough to pull our boat (which is the reason for owning something this large) and the Armada/Titan's 8 cyl runs like a tank engine, very rough and it gets really bad gas mileage too. In conparison the Chevy engine runs silky smooth, has plenty of power, and unlike its Japanese counterparts, is engineered as a Flex Fuel vehicle which means we can run it on renewable E85 instead of gasoline.

The Toyota and Nissan trucks look good on paper, but go test drive them and there are a lot of annoying things about them that turn people off. I have no doubt they will eventually catch up but the point here is that GM is more than capiable of building a well built, well engineered vehicle. But this really isn't GM's problem.

GM's biggest problem is its incompetant and arrogant management. While GM's unionized contracts are a big problem for it, its management has consistantly made bad decisions as they are only interested in the short term and don't take the longer view hat you see Toyota and Nissan taking. They have consistantly misjudged the market and it has gotten them in a lot of trouble. The one bright spot that GM had in the last couple of decades, Saturn, has been destroyed by the same bungling management which has completly thrown away the mind share generated by Saturn when it was first created.

What you are seeing now is a company whose cash cow, big trucks, dry up as gasoline has gotten more expensive. Toyota, Honda and to a lesser extent Nissan are going to clean their clock again, just as they did in the 70's when we had the oil shocks.

I agree with much of what you say, at least in defense of the domestics' quality. I think the German cars are stylish and great to drive, but maintenance is a problem. And while I'd love a Passat, I think I'd be buying some real headaches.

I've driven mainly Fords--had a new '82 Escort that I sold in '90 with 135,000 miles on it. The AC compressor gave out, but that was the only expensive repair. Other than that, it was probably no more than $100 yr. on maintenance. Same with a '94 Taurus wagon I've still got--it's got 173,000 on it, a couple struts were the only expense. Even the AC still works. The thing's built like a truck, doesn't even rattle.

I agree too that unions aren't the only big problem. Bob Kelleher, the president of Southwest Airlines--a heavily unionized yet profitable (!!) airline said that if a company has a labor problem what it's really got is a management problem.

Of course, the 300 pound gorilla in all this is the fact that US companies have the expense of employee health coverage which is paid out of the company's bottom line. Foreign competitors don't have this added expense--it's spread throughout the nation's entire population. Of course, I exclude foreign automakers in the US--they still have to do the private insurance thing, or else do self-insurance.

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I don't know much about cars - but I can vouch our Jetta, which my wife & I depend as our only car, is nothing but a headache.

Indeed. I don't think I know anyone that I know is happy with their VW. This was the first foreign manufacturer to open a plant in the USA to meet demand. They did this in the 70s. However VW's overall quality became so bad they were also the first foriegn manufacturer (and maybe the only one) to close their plant. They also once built 4 cyl engines for GM here in the USA, but that business is long gone for the same reasons.

Imports are not always a good bet and several have been saved by GM & Ford

Mazda - when they were pre-Ford, they also had many many quality problems. Ford at least got them to put out a decent car. This was the only Japanese manufacturer to be taken over by the Americans. The very first car I owned was a used Mazda RX-2 (back when all of their vehicles had rotary engines). It had all kinds of breakdowns.

Nissan (aka Datsun in the USA until recently) - this Japanese brand was often lambasted by Consumer Reports in the past decades for being poor quality and engineered to fool the EPA tests rather than getting decent mileage. They almost failed as automobile company, but made an alliance with Renault which has saved them. This is really surprising as Renault pulled out of the USA market because nobody would buy their really bad quality cars.

Speaking of that.

Ford now owns - Jaguar, Volvo (automobiles), Mazda, Land Rover, Astin Martin

GM owns - Saab, Hummer Vauxhall, Opel, Holden

The only Japanese manufacturers that have been consistantly good in the USA have been Toyota and Honda.

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Mazda is about the best car produced IMO. Pre-Ford as well, outside of their RX series which always had problems before Ford took them over. The 323 and 626 were always very reliable and durable cars. I'm a big fan of Mazda. I like alot of the stuff Nissan produces now too, and Hyundai is getting better as well. Toyota makes a good high quality car, but for some reason they seem more of a family car, and their models appeal to me less, I don't think I'm their demographic. LOL

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GM would keep this plant even if they close all of their plants. Why? Cause it is the easiest to adapt to a more streamlined assembly process like that at Nissan. The plant is a huge building, almost as big as Nissan-Smyrna, and takes up a large footprint. If, and its a big IF, GM was to pull out totally, they would sell the building or at least market it on the open market for a another car company. The plant is simply too large for anyother type of manufacturer. The plant is the closest thing to "Japanes" style production lines that GM has. That alone makes the place that much more valuable in the long run for GM.

And as far as Nissan quality. It WILL be better than all the other Japanese automakers before it's all said and done. Honda makes a good car, puny, but good. Toyota, like RK said, is an elderly person car. And Mazda thinks everything it builds has to look like a sports car. Not to mention that Mazda is built by Ford, YUCK! (something will have to give in the Ford household soon too) Nissan has the tools and, believe me, the talent to take over a large marketshare left behind. Only time will tell if they do it. I personally, have complete faith they will. Now, if we could just work out the problems in Mississippi we (Nissan) would be alright.

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^ I agree, I would also think its the most affordable one to operate compared to its northern plants. I think I heard the Ion was going to be possible phased out anyway, so I would not be suprised GM does not move another line down to Springhill sooner rather than later. On NPR today they reported GM was committed to getting another line in Springhill in the future.

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^ They will. All it would take is a re-tool of the plant and training. Which could take around a year or less to do. The plant was built to produce 500,000 units/year. I don't think it has ever been at capacity since its opening though. In comparison, the Nissan plant in Smyrna was originally built to produce 300,000/year. It is now designed. and easily builds, almost 600,000 units per year. Each day that you wake up, that plant is at, or above, capacity in Smyrna.

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i doubt gm will completely shut down the spring hill plant. the ion will be phased out soon. but saturn will be dropping two new cars in the next couple of years. the problem is, they are both built off of the same platform of other gm cars. i wish they'd understand that if it doesn't sell well as one brand, it probably won't as the other brand. this is what has really killed gm. no originality. you pull up in any gm besides a corvette or silverado, and people think you've pulled up in a rental car. it's sad. i hope that the spring hill plant doesn't close down. if they do, i think that middle tennessee should just give gm a big middle finger and all buy fords. might as well help a domestic brand that is actually trying.

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This is a big blow for the Nashville area... the loss of 1500 very high paying jobs. The more worrying aspect of this, however, is the prospects of even further cuts, and (heaven forbid) even total plant closure. Hopefully, the cuts will never go deeper than 1500.

GM is in very serious financial shape. The enormous pension obligation and the excessively adversarial relationship between management and the UAW (the incessant Union demands and workrules have driven labor costs up to about $50 per hour including benefits) are the primary causes of this predicament. The Unions response to this development? ....."They're going to really have a tough time at the next bargaining talks as a result of this." The Union evidently will never ever get it. This is a life or death crisis that they are in, and the only possible way they will get out of this mess is to work together with GM management. The ridiculous work rules will have go out completely and a relationship based on trust will have to begin. The chances of this happening... absolutely nil, IMO.

I personally believe the only ultimate way out of this mess may be Chapter 11. The company could then break the viselike grip of the Union and start over fresh with a leaner, much lower cost structure. The company possesses a huge talent pool; and, with a new low cost structure and no longer burdened by an adversarial union, would have the capability of regaining it's glory of old. If that would happen, I could see the Saturn Plant one day actually reaching the heights envisioned of it when it began.

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