Exclusive: GM plans to move some Chevy Equinox assembly to Mexico -source
Wed Aug 27, 2014 8:18pm EDT
By Bernie Woodall and Paul Lienert
DETROIT (Reuters) - General Motors Co and the United Auto Workers on Wednesday trumpeted the news that production of the Cadillac SRX would be shifted from Mexico to Tennessee, but Reuters has learned that GM also plans to move some other assembly work in the opposite direction.
The company plans to shift some production of the Chevrolet Equinox from Spring Hill, Tennessee, to Ramos Arizpe, Mexico, when the crossover vehicle is redesigned in 2017, according to an industry source familiar with GM’s plans. That move could partially offset any new jobs created by the shift of SRX work from Ramos Arizpe to Spring Hill, which is expected in mid-2016, the source said.
Both GM and the UAW declined to comment on whether the Equinox work would move to Mexico.
As for how many jobs the addition of the SRX at Spring Hill would create, based on current and projected figures provided by GM, Reuters estimates the move could add about 200 jobs at the plant. A GM spokesman said it would be “fair to say” there would be a net increase but declined to be specific.
Earlier in the day, UAW President Dennis Williams said in a statement that the shift of Cadillac production from Mexico to the United States was "a big victory" for the union. The UAW declined to say how many jobs would be added in Spring Hill.
GM told Reuters on Wednesday that the current SRX will continue to be assembled in Mexico for an unspecified period of time after the new SRX begins production in Spring Hill.
GM said a year ago it planned to invest $350 million in the Spring Hill plant, which was built originally for GM's now-defunct Saturn brand. At the time, GM said the Spring Hill plant would be retooled to build two new midsize crossover vehicles.
In addition to the new SRX, the plant is expected to build a replacement for the GMC Acadia, according to the source, who spoke on condition of anonymity.
On Wednesday, GM said it will invest another $185 million to build a new class of engine in Spring Hill. The engine plant will retain about 390 jobs, GM said.
The retooled vehicle assembly plant will require about 1,800 hourly workers, GM said.
The Spring Hill complex currently employs just over 2,000 hourly and contract workers in vehicle and engine assembly, stamping and molding operations.
GM plans to build the next-generation Equinox, along with a replacement for the GMC Terrain, another crossover, in Ingersoll, Ontario and Ramos Arizpe, according to the source.
During contract talks in 2011, concessions granted by the UAW to GM before the automaker's 2009 bankruptcy, including the establishment of a two-tier wage system, helped GM decide to make the Equinox at Spring Hill instead of producing it in Mexico. A hallmark of the four-year agreement signed in 2011 was new work at several plants, including Spring Hill, instead of raises for veteran union auto workers.
GM suspended production of autos at Spring Hill in 2009. The plant continued to operate at reduced capacity as an engine plant until 2012 when GM resumed building vehicles there.
The former Saturn plant was once the site of GM's experiment with a more collaborative relationship with workers based in part on the model of Japanese automakers led by Toyota Motor Corp.
GM scrapped the Saturn brand in 2009. By that time, Saturn production had been already shifted away from Spring Hill.
(Reporting by Paul Lienert and Bernie Woodall in Detroit; Additional reporting by Veronica Gomez in Mexico City; Editing by Jonathan Oatis, Eric Effron and Cynthia Osterman)