General Motors will spend $244 million to make its idled Spring Hill, TN, assembly plant into a swing facility capable of building a number of vehicles, starting next year with the Chevy Equinox.
The auto maker says today Spring Hill assembly will produce “a variety of products on a range of platforms” to help maintain production of vehicles when their home plants shut down for retooling. GM says Spring Hill also would enable the auto maker to react more quickly to sales spikes.
The assembly plant restarts in the second half of next year building the popular Chevrolet Equinox after a $61 million investment. Asked what other products it might build there, GM says only “future midsize vehicles.”
A second investment of $183 million has been allotted for preparation.
GM and the United Auto Workers union first announced plans to reopen Spring Hill assembly, idle since 2009, when the two agreed on a new 4-year labor contract in September.
The UAW pegs GM’s investment at $419 million, accounting for additional spending the auto maker’s outlay would spur.
The Equinox midsize cross/utility vehicle has been a home run for GM since its redesign two years ago. Sales were up 43% through October, according to WardsAuto data, against an industry tracking 10% ahead of like-2010.
To meet demand for the Equinox and its GMC Terrain platform-mate, GM runs their home plant in Ingersoll, ON, Canada, on three shifts, plus overtime.
The auto maker also ships unfinished Equinox bodies to its nearby Oshawa, ON, for final assembly. GM says the shuttle will continue after Spring Hill comes back. The auto maker also recently increased line speed at Ingersoll.
Given the popularity of the Equinox, GM made the unusual move of importing to the U.S. its Chevy Captiva global CUV for fleet sales.
A 5-passenger CUV sold in the U.S. as the Saturn Vue until the auto maker’s 2009 bankruptcy, the Captiva allows GM to keep all Equinox sales in the more profitable retail market.
“We’re going to keep doing clever things that don’t necessarily change break-evens for the company,” GM North America President Mark Reuss tells WardsAuto in a recent interview, during which he discussed Spring Hill’s future.
GM has structured its business so it will break even if annual U.S. sales fall as low as 10.5 million.
Prior to its 2009 bankruptcy, the auto maker could not earn a profit in a sales year of 17 million units, due partly to overcapacity.
GM expects the two Spring Hill investments will create more than 1,800 hourly and salaried jobs.
It is unclear if GM will hire new hourly workers for Spring Hill assembly at the lower range of a 2-tier wage agreement it reached with the UAW three years ago.
The plant began life in the 1980s as a dedicated Saturn facility and last built the Chevy Traverse large CUV before its production was moved to GM’s plant in Delta Twp., MI.
The Spring Hill site also includes a powertrain and stamping facility that has maintained operation through the sales downturn and recently received a pledge of more than $500 million from GM to build next-generation 4-cyl. engines.
–with Christie Schweinsberg in Los Angeles