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GM to build new pickups in Missouri, 2 mid-sized models in Tennessee Read more: http
DETROIT -- General Motors plans to build its next-generation mid-sized pickup in Missouri and will reopen its former Saturn assembly plant in Tennessee to build two new mid-sized vehicles, according to details released Tuesday of its tentative pact with the UAW.
GM has been tight-lipped about whether it planned U.S. production of the next iteration of the Chevrolet Colorado and GMC Canyon, its small pickups. GM unveiled a Colorado concept in Thailand in March, calling it a mid-sized pickup, but has not said whether it would make or sell the truck in the United States.
Plans for a $380 million investment to make a mid-sized pickup at GM's Wentzville, Mo., plant were revealed in a 20-page summary of the labor pact released by the UAW. The union says GM has agreed to retain or create 6,400 jobs as part of $2.5 billion in planned product and plant investments under the new accord.
In addition to the new pickups, the Missouri plant will continue to build full-sized vans for Chevrolet and GMC, the union said.
Under the contract, GM's assembly plant in Shreveport, La., where the Colorado and Canyon are now built, is still scheduled to close by June 2012, and an assembly plant in Janesville, Wis., will remain idled and on standby.
A GM spokeswoman said the automaker won't comment on future production plans. The company is expected to disclose details of the UAW agreement next week.
GM will find less competition in the market for smaller pickups. Ford is expected to discontinue its compact Ranger later this year. And Chrysler Group recently decided not to replace its Ram Dakota.
Aaron Bragman, an analyst at IHS Automotive, said the market for small and mid-sized pickups has become a tricky one for automakers. The segment has eroded as full-sized pickups have become less expensive and more fuel efficient.
"This is kind of a gamble by GM to say, 'We think there will be a market for something smaller," Bragman says. It also will help GM meet tougher fuel-efficiency standards that will ratchet up through 2025.
Compact and mid-sized pickups accounted for 16.5 percent of the total U.S. pickup market in 2010, according to the Automotive News Data Center.
U.S. sales of the Canyon are up 47 percent this year through August to 7,176 units, and demand for the Colorado has climbed nearly 40 percent to 21,814.
New life for Spring Hill
GM's assembly plant in Spring Hill, Tenn., which was put on standby in 2009, is slated to get "two mid-size vehicles," according to UAW's summary. The work had been planned for Mexico, the union said.
The Tennessean newspaper reported that the plant might be used as a spillover facility to make the hot-selling Chevrolet Equinox and GMC Terrain crossovers. Last weekend, the paper quoted an economic development official from Tennessee who said GM officials raised that prospect during a meeting in Detroit last week.
U.S. sales of the Equinox have jumped 48 percent to 129,538 this year through August; Terrain sales have advanced 61 percent to 56,541 in the same period.
UAW Vice President Joe Ashton told reporters Tuesday that he expects Spring Hill to reopen sometime next year with about 500 hourly workers. GM will invest $61 million on one vehicle program at the plant and $358 million on another, eventually creating about 1,700 jobs total, the UAW said.
Moving overflow production to Spring Hill would help alleviate tight supplies of the high-demand crossovers. As of Sept. 1, GM had a 33-day supply of the Equinox and a 42-day supply of the Terrain – two of the thinnest stocks among GM's high-volume vehicles.
"If you can get 100 Terrains, you want 100 more," says Sam Slaughter, dealer principal at Sellers Buick-GMC in suburban Detroit.
New compact in works
The UAW's summary mentioned a few other product-related details from the contract:
• GM will continue to build full-sized pickups at its Fort Wayne, Ind., plant when the next-generation of the Chevrolet Silverado and GMC Sierra reach the market, likely in early 2013. GM will invest $230 million in that plant, the union said.
• GM committed to build an unspecified compact vehicle that will create more than 500 jobs at an unnamed plant, the UAW said. It is unknown what brand or model that car would be. Sources have told Automotive News that GM plans to bring a rebadged version of the redesigned Opel Astra, a three-door compact, to North America as a Buick.
• Three investments totaling $925 million will add a combined 690 jobs at a powertrain facility near Detroit, an engine plant near Detroit, and a castings plant in Saginaw, Mich. All of that work had been set to move to Mexico, the union said.