General Motors Corp. is nearly finished examining the economic data it will use to help choose a location for its Saturn Corp. manufacturing complex, GM officials said yesterday.
But the company will need about two more months to decide where it will build the proposed facility to manufacture the new Saturn cars, the officials said. Saturn is the first new nameplate to be added to GM since Chevrolet in 1918.
The $5 billion Saturn project is GM's attempt to change radically small-car development and production in the United States. The aim is to eliminate the $1,500 to $2,000 production-cost advantage that Japanese auto makers have in producing comparable models.
GM normally announces the plant, or the location of a new plant site, when it publicizes plans for building a new product. But GM broke with that tradition last January when it announced that it was establishing Saturn Corp., a new subsidiary, to build up to 500,000 subcompact cars annually at an undetermined site.
Some people called it public relations savvy. Others, like consumer activist Ralph Nader, called it a corporate charade designed to wring tax breaks and other concessions from potential Saturn locations. But municipalities and states across the country called it a rare opportunity to land 20,000 new jobs and a piece of the nation's manufacturing future, and they flooded GM's Detroit offices with envoys and proposals.
To date, representatives of some 36 states and cities, including 26 governors, have visited GM. A delegation from Central Missouri last week presented the auto maker with a check for $6,000 for "the first automobile to be produced by the Central Missouri Saturn facility" and an offer of up to 2,061 acres in free land to build the Saturn complex.
But GM officials, suppliers and auto industry analysts said this week that those kinds of blandishments will have little to do with the auto maker's final selection.
"We're not going to go to a place where, once the incentives run out, we'll be back in the duck soup of high-production costs again," said GM product spokesman Stanley D. Hall. A representative of one of GM's key materials suppliers, who requested anonymity, agreed.
"They have too much riding on Saturn to go for one-time breaks," the supplier representative said. He said that his company's sources indicate that GM favors the Midwest for a Saturn site, because most of the nation's major auto suppliers are located in a four-state area including Michigan, Ohio, Indiana and Iowa.
"That may be wishful thinking," said Hall, who said that GM's Argonaut Realty division was near completion of a computer analysis of the "hard data" -- taxes, labor compensation rates and other factors -- needed to help make plant site selections.
Argonaut Realty, GM's real estate arm, is the key component of GM's 30-year-old Site Selection Committee, which always does the initial work on plant locations. The committee soon is expected to present its findings to to Saturn Corp. officials, who will make a recommendation to GM's executive committee and board of directors. Final action "will be a consensus decision" involving all of the relevant units of the company and the United Auto Workers union, Hall said.
Said one industry source: "The Saturn complex won't go anywhere where there is a strong personality at GM who is opposed to putting it there."
The site that offers the best prospects for long-term, low operating costs -- taxes, energy, supplier logistics and target-market access -- will receive top consideration, GM officials and industry analysts said. GM also is putting a premium on proximity to a university with a strong engineering curriculum, company and industry sources said.
The Saturn car will be aimed at those geographical markets that have the highest import penetrations, such as the West Coast, where 40 percent of all cars sold are imports (import penetration in Southern California is 50 percent). Nearly 26 percent of the cars sold on the East Coast are imports, compared with the current national auto import sales share of 23.5 percent.
Those market figures, combined with the need for a solid supplier base and a strong research-and-development community, argue for a central geographical location for Saturn, some industry sources said. GM officials, pointing out that Saturn will manufacture many of its own components, said that conclusion could be wrong.
"We're going to stop talking about it," said Hall. "We're getting ready to go underground to do a very thorough, very fair" analysis of all of the information that the various GM groups are bringing to the table on Saturn, he said.
"We want to be fair to ourselves and fair to all of those people who have made presentations to us," Hall said, referring to the state and municipal proposals. "We owe them that much," Hall said.