"We will strive for even higher capacity utilization than the current level of 94%. We will make the total production system leaner, faster and more flexible. We are planning on building new assembly plants to replace and consolidate older plants. The new plants will be lean and agile in every respect, operating 24 hours a day."
- John F. Smith Jr., Aug. 5, 1998
"In 1992 we had 109 models. Today we have 80. We have a product portfolio that gets us close to 70 models,"
- Ronald L. Zarrella, Aug. 4, 1998
If General Motors Corp. is operating at 94% of its capacity with 29 North American assembly plants and is planning to build new more efficient plants, then which of the automaker's existing plants are going to close?
The company's not ready to talk about that so soon after the 54-day UAW strike, but sooner or later it must.
In the interim, analysts, consultants and suppliers can speculate. Ste. Therese, Quebec, and Baltimore seem the most likely targets. Sales of the Quebec-built Chevrolet Camaro continue to sag, while Pontiac Firebird sales are up 22% this year through July. If either or both cars survive, they will likely move to a more flexible lower-cost plant tooled for a rear-drive chassis. The next iteration of the rear-drive M-van, now produced in Baltimore, will move to Wentzville, MO.
But supplier sources say GM is questioning whether any of its East Coast assembly locations, including Wilmington, DE, and Linden, NJ, are compatible with the requirements of just-in-time parts delivery. The cost of shipping engines, transmissions and body stampings from plants in the Midwest to the East Coast is prohibitive in an era of just-in-time inventory control.
As for Chairman Smith's objective of replacing older inefficient plants with greenfield modular assembly plants, there is a lot of talking to do with the UAW before that can occur. And, union politics aside, logistically it can't happen overnight.
"It will be difficult to pull this off before 2003 or 2004," says Michael Robinet, an analyst with CSM Forecasting in Farmington Hills, MI. "Look at the incubation period for building a new plant: You usually need at least three years. By the time you buy land, get local abatements, build the factory, construct service roads, hire and train new people, we're likely not to see production out of a new plant until the 2003 model year."
The other plant facing uncertainty is Arlington, TX. The processes, body shop automation and simpler design of the GMT800 pickup trucks and the sport/utility vehicles to be built off of them are expected to generate such productivity gains that GM will need only five plants. Those will be Oshawa, Ontario, Pontiac, MI, Fort Wayne, IN, Janes-ville, WI, and Silao, Mexico.
Arlington has no plan for a contiguous stamping plant and no product assigned to it beyond the 2000 model year. - Greg Gardner
