GM identifies 14 plants to be closed or idled, including 4 assembly plants

ERJ staff report (AN)

Jamie Lareau, Automotive News

Detroit, Michigan -- As part of its restructuring under U.S. bankruptcy protection, General Motors today unveiled the 14 production facilities slated to idle or close by year-end 2010.

Four assembly plants will close or idle: Wilmington, Del.; Pontiac, Mich.; Orion, Mich.; and Spring Hill, Tenn. Orion and Spring Hill will be put on stand-by status this fall.

GM said it will build a small car at one of its U.S. assembly plants that is on standby capacity status. The small car is likely to be the Chevrolet Spark mini-car modeled after the Chevrolet Beat, according to two sources familiar with GM's product plans.

GM is not announcing where that car will be built other than to say it will re-tool a plant to accommodate the car. The re-tooled assembly plant will be capable of building 160,000 cars annually.

The new manufacturing plan cuts GM's total number of assembly, powertrain and stamping facilities in the United States from 47 in 2008 to 34 by the end of next year. GM will have 33 by 2012. GM says under this plan, it will achieve full capacity utilization of its assembly operations in 2011. That's two years ahead of what was scheduled in its Feb. 17 viability plan submission. GM says this will result in lower fixed costs per vehicle sold. It will also have a lower and more efficient capital investment.

GM in October plans to close its plant in Pontiac, where it builds the Chevrolet Silverado and GMC Sierra heavy duty trucks. That plant has been running on one shift since early spring -- building about 1,000 vehicles a week.

In July of this year, GM will also close its plant in Wilmington, where it builds the Pontiac Solstice, Saturn Sky and Opel GT roadsters.

GM is phasing out the Pontiac brand by year-end 2010. It is trying to sell Saturn and Opel brands.

On May 11, during a conference call with reporters, GM CEO Fritz Henderson said GM would consider selling the Wilmington plant as well the production equipment and rights to build the vehicles.

Said Henderson: "If someone were to approach us with a proposal that made good sense for our people, we would be open. We are not out actively trying to market a plant, per se. But if a party were interested, we'd be very open to this and would encourage it. We haven't had any inbounds on the subject at this point."

GM will put its plant in Orion -- where it builds the Chevrolet Malibu and Pontiac G6 sedans -- on standby capacity starting in September.

GM will put the plant in Spring Hill on stand by in November. GM builds Chevrolet Traverse crossover in the Spring Hill plant. The engine plant at Spring Hill will continue.

In its relatively short life -- 20 years -- Spring Hill was a super nova among GM's manufacturing plants. Opened in 1990 as the sole source of Saturn cars, Spring Hill was GM's $2 billion effort to embrace and champion the more efficient, vertically integrated Japanese auto-making culture that was roiling competition at the time.

Its 7,000 employees were highly trained in Toyota-influenced operating methods of quality control and cooperative decision-making. But as the small-car market fizzled in the mid-1990s, Spring Hill began to evolve away from its original practices.

The plant was overhauled to produce the Chevy Traverse, starting in 2008. But in the process, the plant became one of GM's most flexible, capable of producing vehicles as disparate as small cars or large trucks. The renovated plant, down to about 3,000 workers now, also developed innovative supplier arrangements, relying on outside vendors to operate inside the Spring Hill facility.

Additionally, GM's Service and Parts Operations announced today that it will cease operations at three Parts Distribution Centers in Boston; Columbus, Ohio; and Jacksonville, Fla. - by Dec. 31, 2009.

Lindsay Chappell and Richard Truett contributed to this report

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From Automotive News (A Crain publication)