Saturn Returns to Orbit

After months of treating Saturn Corp. like any other business center that must meet profit targets to justify new investment, General Motors Corp. has agreed to build a new small sport/utility vehicle in Spring Hill, TN, and substantially boost the capacity from about 320,000 cars a year to 420,000.

Early reports that the expansion could hike Spring Hill's potential output to 500,000 are predicated on GM's commitment to build yet another new vehicle there that has not yet been decided.

The agreement, which members of UAW Local 1853 ratified in early September, spells out Saturn's opportunity to bid on any component work for which outside suppliers are sought.

"The business is ours to lose," says Mike Bennett, manufacturing advisor and bargaining committee chairman for Local 1853. "If we're competitive, then we can actually bring work in."

Mr. Bennett complained for months that Saturn workers were losing influence they once wielded over design and engineering of new models. His members voted on July 19 to authorize a strike.

Specifically, the next generation of what are now known as Saturn's SC, SL and SW models have been developed with Chevrolet, Pontiac and Opel models to be built off the same architecture, known internally as the Delta platform. Earlier this year, executives at GM's Small Car group indicated that some components for a Delta-based SUV slated for a 2002 model year introduction, including engines, transmissions, cockpits and interior trim, would be purchased from outside suppliers.

That would put hundreds of Spring Hill jobs in jeopardy.

At one point, Local 1853 leaders were told the small SUV could be built in either Ingersoll, Ont., where GM jointly owns a plant with Suzuki, or in Lansing, MI, if they didn't accept the outsourcing.

What other vehicles Saturn would build in Spring Hill to justify taking capacity above 500,000 annually is unclear. And how Saturn's expansion affects the future of other GM small-car assembly plants in Lordstown, OH, and Lansing, MI, is equally murky.

Why the sudden change of heart?

Some frank and candid discussions in late August between G. Richard Wagoner, president of GM North American operations, and UAW Vice President Richard Shoemaker helped.

"There's been a reinforcement of the partnership, but the relationship has been severely strained," says Mr. Bennett. "I'm sure this process will undergo serious testing along the way."