General Motors Corp. has chosen Spring Hill, Tenn., as a site for its new Saturn Corp. assembly complex, sources involved in the selection process said here tonight.
The site, about 30 miles south of Nashville, tentatively has been approved by top GM executives and by officials of the United Auto Workers union, those sources said.
Representatives of some 38 states had deluged GM with proposals, significantly delaying a site-selection process that originally was scheduled to be completed in May.
Saturn had been widely sought for the 6,000 production and 10,000 supplier and other related jobs it is expected to generate.
But the sources cautioned that last-minute considerations could change the outcome of what now appears to be the end of a seven-month guessing game about where Saturn will go.
The key "last-minute consideration" is a proposed UAW-Saturn Corp. labor agreement, which will be reviewed here Friday by the union's executive board. Part of that agreement gives the UAW the right to veto any Saturn site that the union feels could undermine its role in the project.
Another part of the pact prevents GM from using what would be more liberal Saturn labor-management arrangements in its big-car operations. Those arrangements, regarded as concessions by some of the more militant UAW leaders, would give Saturn Corp. officials more flexibility in setting up plant-floor work rules, chiefly through the elimination of multiple job classifications. The objective of the liberalized work rules is to help GM overcome the $2,000-per-car production cost disadvantage that it suffers in competition with Japanese auto makers.
"The idea was to give GM and other domestic car manufacturers a chance to become competitive in the most competitive end of the U.S. market, the small-car segment," one union source said.
"But we have clearly drawn a line around the small-car segment. This agreement is not a license for GM to go out and 'Saturnize' all other parts of the company, as GM Chairman Roger Smith said he wanted to do," the union source said.
Top UAW officials here tonight refused to comment on the site-selection and labor-contract reports. Their silence was significant. In the past, they either directly dismissed Saturn speculation or sent word through subordinates that the guesswork was off base. GM officials also refused to confirm or deny the reports, with one notable exception.
"All I can tell you is that if we can get through the UAW meeting tomorrow, then we should have something to tell you," one usually reliable but tenaciously reticent GM official said. "The key is Chicago," that official said.
What the key will unlock is the answer to the riddle that has puzzled U.S. auto-industry observers since Jan. 8, when GM Chairman Smith announced that he would spend an initial sum of $5 billion to set up Saturn Corp.
The new company would have the latest technology, with a mission of producing up to 500,000 high-technology subcompact cars a year at a price that would beat or be competitive with the lowest production cost of cars rolling out of Japan. The success or failure of the company could very well determine the future of U.S. small-car production.
GM sources said that transportation costs apparently were the reason that consideration shifted from Texas as an early front-runner in the site-selection process.
Speculation also centered on Michigan, which even as late as this week was considered a top candidate for the Saturn project. It was unclear last night why Michigan is winding up an apparent loser.
Tennessee offered the best of both worlds, union sources said. The state had acceptable transportation costs, and is rapidly becoming another automotive center, sources said. Japan's Nissan Motor Co. Ltd., which has begun producing compact pickup trucks in Smyrna, Tenn., is an example, sources said.