As the former Saturn plant in Spring Hill gears up to produce a new Chevrolet crossover vehicle, there is an added bonus: The 900 jobs lost when key suppliers to the plant laid off their workers last year have been resurrected and then some.
But even better for the Nashville area: Some of those jobs are going to new hires from the available local labor force, whereas General Motors Corp.'s assembly-line jobs are generally filled by laid-off United Auto Workers from other states where GM has closed plants or cut its production.
The expected boost in auto supplier jobs comes amid a general loss of manufacturing employment in the state. March jobs data showed 13,500 fewer manufacturing jobs statewide than a year earlier, a factor that contributed to a sharp increase in Tennessee's unemployment rate to 5.6 percent.
Statewide, auto manufacturing remains a robust business, even in the current "down" economy. There are 125,000 people employed in the industry, a number that includes the assembly workers at the Nissan plants in Smyrna and Decherd, the GM plant in Spring Hill and the Peterbilt truck plant in Madison, said Michaela Jackson, spokeswoman for the state's Department of Economic and Community Development.
"There are 948 auto supplier companies operating in 194 Tennessee communities," Jackson said.
Key suppliers move in
Two of the three biggest suppliers for GM's Spring Hill plant have moved their operations directly into the facility, which has seen a massive upgrade valued at $700 million to support production of the new Chevy crossover, GM officials said.
They are Premier Manufacturing Support Services and Penske Logistics, both of which have operated in the past in local industrial parks within a few miles of the plant.
Premier, which has provided maintenance services to the plant since it opened in 1989, will provide wheel and tire subassemblies, headliners and door subassemblies for the Chevrolet Traverse, as the new crossover vehicle is called, said Don Langford, Premier's business operations manager at Spring Hill.
"This is our first time in the United States to get into the manufacturing side," he said of Premier, which is a subsidiary of Voith AG, based in Germany. "But we have been at the Saturn plant since it opened, providing all sorts of facilities services such as paint-booth cleaning and housekeeping."
Premier has called back a majority of the 165 workers it laid off when the Saturn assembly line shut down in March 2007, and it will hire new workers locally to boost employment to more than 300 by the time the Traverse enters full production in the fall, Langford said. Multiple other suppliers ship component parts to Premier.
Meanwhile, Penske Logistics will employ 300 to 400 workers when it's completely up and running, providing delivery of subassemblies from Premier and off-site suppliers to the Traverse assembly line to accommodate the plant's just-in-time parts-delivery system, union and local economic development officials said.
No one at Penske would discuss the company's new role at the plant, but Frank Tamberrino, president of the economic development group Maury Alliance in nearby Columbia, Tenn., confirmed the employment projections and said that Penske, Premier and the third large GM supplier, Johnson Controls Inc., all would make significant new hires for their operations.
Johnson Controls, whose facility is in the Maury County Industrial Park in Mount Pleasant, makes seats and other interior components for the Traverse, including the innovative metal floor tracks that allow the vehicle's middle seat to move forward or rearward.
The JCI plant also will have more than 300 workers when it is in full production, Tamberrino said.
Applications roll in
Applications are already being accepted for the Johnson Control jobs and others for the GM ramp-up.
"We are up to our eyeballs in applications now," said Jan McKeel, executive director of the South Central Tennessee Workforce Alliance, which operates a career center at 119 Nashville Highway in Columbia under contract with the state.
"We are assisting in the hiring and screening process for Johnson Controls, and we're also working with Premier and three or four other, smaller suppliers," she said. "We've seen foot traffic in the center increase from less than 100 people a day to over 150 since the hiring process started two months ago. Things are really beginning to pop."
Some supplier jobs are paying more now, too, thanks to an unusual two-tiered wage system that the UAW agreed to when it approved a new contract with GM last September.
That contract allows GM to pay non-assembly workers $14 an hour, a level below full assembly line pay of $28 an hour. Under the previous auto contract, all hourly workers on plant property had to be paid the higher wage.
With the two-tiered system, about two-thirds of the supplier jobs that were in locations off the Spring Hill GM property have been moved into the plant, where the new workers are eligible to join the union and collect wages of $14 an hour plus benefits.
Still, that can be a good deal for many of the workers.
In the past, the nonunion jobs at many off-site supplier facilities paid just $9 to $10 an hour, said Michael Herron, chairman and manufacturing adviser for UAW Local 1853, which represents hourly workers at the GM plant.
Despite the higher wages, which means GM will pay more for the work the on-site suppliers do, the automaker saves money overall because transportation costs for parts assembled on site by the suppliers are less, and the two-tiered wage setup allows GM to pay its own non-production workers, including those in maintenance and other support jobs, the lower wage, Herron said.
The deal also brings new workers into the UAW, which is crucial to the union's long-term survival, analysts say. The UAW's nationwide membership recently dipped below 500,000 for the first time in decades, a result of massive cutbacks by all of the U.S. Big Three automakers.
Those three GM, Ford Motor Co. and Chrysler LLC are closing plants and streamlining operations to try to stem long-term financial losses.
Plant spawns other jobs
Besides GM's three biggest suppliers Penske, Premier and Johnson Controls there are a number of smaller companies "all trying to get a piece of the GM pie" at the Spring Hill plant, Tamberrino said.
There are roughly one dozen suppliers in the Spring Hill area, although most of those now have contracts to make parts for other plants and automakers besides the Spring Hill GM facility. Most of those companies are not unionized, and the average wage is about $10-$12 an hour.
No final numbers are available yet on how many supplier jobs will be directly connected to production of the Traverse, Tamberrino said.
"We're just waiting for the plant to get up and running, and for all the suppliers to go full speed," he said. "That's a moving target."
The change in the UAW contract that allowed suppliers to be brought in-house at Spring Hill is advantageous to the union and GM, said Erich Merkle, automotive manufacturing analyst for the consulting firm IRN Inc.
"The UAW can increase its membership base, while GM can pay much lower wages for some jobs in the plant," he said. "It helps make GM more competitive with Toyota, Honda and Nissan."
That was the whole reason for the two-tiered wage plan, said Dan Flores, GM's manufacturing and labor spokesman.
"When we went into contract bargaining, one of big issues was the competitive gap," he said. "A chunk of what we were paying our employees full wages to do were things that our competitors Toyota, Honda and Nissan had outsourced.
"What we have been able to do is secure this entry-level wage schedule that allows us to keep the work in-house, but pay at the same wage and benefit levels as our competitors for work not tied directly to the building of a car or truck, such as material handling and janitorial services."
That allows GM to keep the jobs in-house rather than outsourcing them, he said. "It's a win-win for everyone."
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