"Saturn plant to almost double capacity, add vehicle"
By Ben Klayman
DETROIT, Sept 9 (Reuters) - General Motors Corp.
said Wednesday it plans to almost double annual capacity at its
Saturn plant in Spring Hill, Tenn., with the possible addition of
a new sport utility vehicle.
Saturn Chairman and President Don Hudler said during a
conference call with reporters that the world's largest
automaker plans to increase the small-car plant's annual
capacity to 500,000 units from around 300,000.
"Our focus is clearly on growing the company, which will
include not only additional product from a variety of products
but will include higher volume levels going forward," he said.
The announcement was part of GM's deal with the United Auto
Workers to avoid a strike by the plant's 7,300 hourly workers.
The automaker also is set to add some 1,000 jobs at the
plant, people familiar with the deal said. About 700 jobs would
be added if the production goal is reached and the rest if Saturn
is picked to make new four-cylinder engines for the cars and
sport utilities.
Hudler declined to confirm reports by UAW Local 1853
officials that the additional product will be a car-based sport
utility vehicle that would compete against Honda Motor Co. Ltd.'s
<7267.T> CR-V and Toyota Motor Corp.'s <7203.T> RAV4, but
acknowledged Saturn has a "high desire" to make a sport utility.
Nextrend consultant Wesley Brown said GM plans to introduce
the sport utility in January 2002 as a Saturn and six months
later as a replacement for the Chevrolet Tracker. Plans to make
it under the Pontiac brand were dropped, he said.
ING Baring Furman Selz analyst Maryann Keller said it was
about time GM put another product in a plant that makes an old
car with slowing sales.
"There should have been another product scheduled for that
factory, frankly, four years ago," she said. "No factory can live
on the same product forever and that factory has been building
that car since 1990."
Saturn sales were down 10 percent to 158,108 cars through
August, and the next-generation Saturn small car is not due until
mid-2002, Brown said. Next year's introduction of a mid-size
Saturn sedan at GM's Wilmington, Del., assembly plant will only
further erode Saturn's small-car sales, Keller said.
Hudler said GM still believes small cars have a "bright
future," but added the way to protect jobs at the Saturn plant is
to make it flexible enough to build other vehicles. He said the
decision to expand the plant is unrelated to the company's plans
to consolidate its small-car operations.
Nextrend's Brown said GM's decision to build the sport
utility in Tennessee raises questions elsewhere.
Speculation about closures had previously centered on the
assembly plant in Lordtown, Ohio, where GM makes the Chevrolet
Cavalier and Pontiac Sunfire small cars. However, Brown said the
facility in Ingersoll, Ontario, where the automaker has a joint
venture with Suzuki Motor Corp. <7269.T> making the Tracker and
Suzuki Sidekick, also could be in jeopardy.
Canadian Auto Workers President Buzz Hargrove said the
Ingersoll plant is not in jeopardy because workers there just
approved a new three-year agreement, which starts in September.
He does not know what product will be made there.
UAW officials in Tennessee said GM's decision was not made
simply due to pressure from workers, who authorized in July the
plant's first strike. GM also will turn a profit, UAW Local 1853
manufacturing advisor Mike Bennett said.
"General Motors' principle of investing capital where it will
earn the return is preserved," he said during the conference
call.
Almost all 1,500 of the plant's hourly workers who attended
two meetings Tuesday approved the agreement, UAW Local 1853
President Joe Rypkowski said. Saturn employees work under a
separate agreement from the national pact that covers all other
UAW workers at GM.
Saturn workers, who earn bonuses to make up the difference in
the GM pay rates, will receive $1,010 apiece as part of the the
plant's unique risk-and-reward pay system based on plant quality
and production, according to a summary workers received Tuesday.
They each had previously received $390 for the quarter.
Each worker will receive about $400 for the third quarter,
the document said. The fourth-quarter payout and 1999
compensation formula also were resolved but first must be
approved by Saturn's board of directors.
((--Detroit Newsroom, 313-870-0200)) |
