Tennessee yesterday won the $3.5 billion sweepstakes for General Motors Corp.'s Saturn car manufacturing complex, giving a giant boost to the state's fledgling auto industry and to its rapidly growing image as the industrial wonderland of the South.
GM will join Nissan Motor Co. Ltd., Tabuchi Electric Co. of America, Bridgestone Tire Manufacturing USA Inc. and a host of other Japanese and American companies that, in recent years, have put down stakes in the Volunteer State.
Ending a seven-month guessing game, GM chose Spring Hill, a little town some 30 miles from Nashville, as the site for its showdown with Japanese car makers.
The Saturn facility is GM's bid to revolutionize small-car production in the United States through the use of high technology and an innovative labor agreement that it hopes will reduce or eliminate the $2,000-per-car production-cost advantage of Japanese auto makers over their American competitors. Its success or failure could determine the future of small-car manufacturing in the United States.
As a result, the Saturn plant means more than jobs. A successful Saturn launch would give its home town global prestige and attract to Tennessee a stream of pilgrims hoping to learn how to streamline costs and improve quality.
Some 38 states and more than 1,000 individual communities competed for Saturn. The blandishments from suitors were many: New York even offered $1 billion in free hydroelectric power to get Saturn and its potential 30,000 auto-related jobs. But GM, instead, settled on a town and state that, by comparison, offered it relatively little in direct financial incentives.
GM isn't saying why it picked Tennesssee until it makes its formal presentation today in Nashville. But those, particularly the Japanese, who have been monitoring Tennessee's business climate, say the answers are clear. The state has a highly accessible and relatively inexpensive transportation network, a vast pool of willing and trainable labor and a central location that is within one day's delivery of 75 percent of the nation's consumer market.
It also has what many businesses view as an acceptable attitude toward unions: organized labor can come in, if invited by the employes, but there certainly is no welcome mat. Tennessee is a right-to-work state, which means workers don't have to belong to a union to keep their jobs in a union-organized plant.
In addition, the strong work ethic in the state has been cited by more than a dozen Japanese companies, ranging from car manufacturers to makers of microwave ovens, who have located manufacturing facilities in Tennessee, most of them concentrated around Nashville.
The success of Nissan's $750 million car and light truck manufacturing facility in Smyrna, Tenn. -- the largest single Japanese investment in the U.S. -- is believed to have played a major role in the choice of middle Tennesse for Saturn. UAW officials, who have been unsuccessful in their attempts to organize the Nissan plant, are hopeful that GM's move into the neighborhood will help their organizing efforts.
"The important thing is that we can demonstrate that we can build small cars competitively here in the United States in not only a union plant, but in the most union-involved plant in the country," UAW Vice President Donald E. Ephlin said last week. "I would hope that that would make an impression on the workers at Nissan."
Beyond cars, Japanese industrial giants are putting out many made-in-Tennessee products. Sharp Manufacturing Co., with a plant in Memphis, and Toshiba America Inc., with manufacturing facilities 35 miles from Nashville in Lebanon, are making microwave ovens and televisions. Komatsu American Manufacturing Corp. recently announced plans to begin producing forklifts and other construction equipment in Chattanooga.