Beyond Saturn

Maury County moves on, diversifying its industrial base after General Motors' cutbacks [From the January/February edition of Nashville Post magazine]

There’s an old Tennessee saying that you dance with the one who brought you. Maury County was a loyal partner for more than two decades, but after being left on the sidelines by General Motors, this southern Middle Tennessee community is looking for a new partner.

“We value GM and what it brings to our community, but we’re not going to rely on them solely to bring prosperity to our community,” says Brandom Gengelbach, president of Maury Alliance, the county’s economic development organization.

Twenty-five years after winning an intense national competition for GM’s Saturn factory, which at its peak employed 8,000 workers, and about a year after GM moved production of the last vehicle made at the plant, Maury County leaders are contemplating what life might be like if other industries less volatile and political than automobile manufacturing were the county’s major employers.

“Our efforts are to diversify to other industries so we’ll be less susceptible to one industry,” says Gengelbach.

Well-situated on Interstate 65 between Nashville and Huntsville, Maury County has its eye on warehousing and logistics businesses, and with good reason. County officials believe that industry will grow dramatically after 2012 when State Route 840’s southern loop connects with I-40 west of Nashville. Maury County will then have easy access to interstates running in four compass directions, he says.

Or, the county might be able to attract companies in the fast-growing health care sector who are looking for a suburban location. Maury County is within an easy commute from Nashville, Brentwood and Franklin, home to HCA, LifePoint, Community Health Systems and many other health care companies. The county already has a regional health care presence with Maury Regional Medical Center. The 275-bed nonprofit hospital in Columbia provides state-of-the-art health services close to home for residents throughout southern Middle Tennessee.

Another vision is that Maury County could become a hub for administrative support and back-office jobs like the 750 positions that Jackson National Life is creating at its new regional headquarters in nearby Franklin. The company eventually will take 120,000 square feet of office space.

Maury officials believe they are ready. In 2009 they hired Gengelbach, who came from Indianapolis and previously worked at the Greater Nashville Chamber of Commerce and elsewhere. They have created a public-private partnership to raise $2.75 million over four years for recruiting new employers and creating jobs. And the three cities, Columbia, Spring Hill and Mt. Pleasant, are working together to recruit jobs and investment.

“What’s good for one is good for the other. We’re not competing with ourselves anymore,” says County Mayor Jim Bailey.

And county officials even have a building that a large employer like Jackson Life could occupy, or at least they will if GM agrees to let them use it. The 300,000-square-foot Northfield Building, where GM trained thousands of workers over the years, would be a perfect tool for recruiting administrative and support jobs.

“They’re not really using it (fully), and it has lots of space for back-office jobs, says Gengelbach.

GM’s influence extends beyond just one building. Even as they plan for a future that is less dependent on GM, county officials acknowledge that the company’s decisions have a huge impact on the economy.

To understand how decisions made at GM’s Detroit headquarters affect the local economy, just compare two recent economic development events. On Sept. 8, auto parts supplier IB-Tech justifiably made headlines with its announcement of a $50 million investment in a new Mt. Pleasant facility that will create 385 jobs. The Maury County plant will be the Japanese company’s second U.S. facility.

Nine days later, GM announced it is investing another $483 million in the Spring Hill facility and recalling more than 400 workers to build its engine of the future, the fuel-efficient Ecotec. That will bring employment at the plant to about 1,500.

The Saturn plant, or, as it is properly known now, the GM-Spring Hill Manufacturing Facility, will have less than one-fifth as many employees as Saturn did at its pinnacle when it was rolling shiny new SL sedans, S-series cars, VUEs and IONs off the line. Even so, the plant is still the county’s third-largest employer.

The last time the plant made national headlines was in 2009, when GM announced it was idling the facility, laying off 2,000 workers and moving production of the popular Traverse crossover vehicle to Michigan. That news came not long after the company invested more than $600 million at Spring Hill to tool up for production of the Traverse.

That kind of illogical roller-coaster ride might confuse economic development officials in some communities, but Bailey, the county mayor, is philosophical.

“How many counties would kill to have a 1,000-job factory?” he asks.

Yes, Bailey says, GM broke promises when it pulled the Traverse out of Spring Hill and sent production to Michigan. Those lost jobs are one reason the unemployment rate hovers around 14 percent, well above the state and national averages, depressing retail sales and the housing market. And he’s convinced the decision was political, coming as it did at the time GM was asking for a government bailout.

“Michigan is the UAW’s home and GM’s headquarters. And President Obama carried Michigan and he didn’t carry Tennessee. People say things like that don’t matter. I think it does matter,” says Bailey.

But he also points out that since ceasing Saturn production at the plant, GM has announced investments of more than $1 billion to modernize it. That’s roughly as much as Volkswagen is spending on its new headline-grabbing factory in Chattanooga.

The plant is a tremendous asset for both the community and GM, and Bailey is convinced the company will eventually put it to better use than producing engines. He isn’t alone.

“Spring Hill remains a crown jewel among GM's manufacturing assets,” says Lindsay Chappell, who covers the industry from the Brentwood bureau of Automotive News magazine.

“Why the plant ceased vehicle production in the first place is a murky story. But the plant remains in place. It survived the sell-off of unwanted GM assets following the bankruptcy. The plant has continued building engines all along, and is now having its engine mission expanded. So it is sitting ready for its next big assignment,” he says.

That will happen as soon as the North American automobile industry’s sales reach an annual pace of 13 million cars and trucks, says Chappell, adding that could happen by mid-2011.

“It is inescapable. GM will return to health through bigger sales volumes. And to reach larger sales volumes, it has to be able to manufacture more vehicles. And that means it has to turn the lights back on in Spring Hill,” says Chappell.

If GM doesn’t make full use of the Spring Hill plant, someone else will want it, says Michael Randle, editor and publisher of Birmingham-based Southern Business & Development, which also produces SouthernAutoCorridor.com.

“I don’t know of a factory that’s had more money poured into it over the years,” says Randle. “When they closed it, it blew my mind.”

But he adds a truth that is also on the minds of Maury County’s officials. GM is “sort of a wild card,” and it’s hard to predict what the company will do.

For example, Randle had predicted years ago that GM, Ford and Chrysler would establish “a beachhead in the South. That way they could ditch the union. That didn’t happen.”

GM’s recent growth has been in the Midwest, where the United Auto Workers Union is strongest, not in Southern right-to-work states like Tennessee. Still, GM has placed some of the industry’s most-sophisticated equipment in Spring Hill. “Somebody’s going to use that plant,” says Randle.

Any jobs GM returns to the plant will have a broad impact on the economy, says Mike O’Rourke, president of UAW Local 1853.

“If we could put 1,000 people back to work in the plant, that would create 7,500 jobs outside the plant,” he believes.

Whether or not that estimate is too optimistic is beside the point, says O’Rourke. It’s hard to imagine that any other business could match GM’s potential impact on Maury County, at least in sheer numbers of potential employees and payroll.

“All these small businesses should want the plant back open. The more people who are working, the more money they’ll spend in their businesses,” he says.

Gengelbach agrees that GM is a tremendous asset, but Maury County has learned a lesson about putting all of its eggs in one basket.
    
“They are focused on running their company. From our standpoint, we’re focused on the abilities we have to offer with our workforce,” he says. “I don’t view it as much as (GM being) a fickle dance partner. This is business. GM has no fairy tale responsibility to operate in a utopia. You can’t have sole reliance on one industry to move your community forward.”

County Commissioner Davis Burkhalter, who represents the Spring Hill area, hopes GM will begin making vehicles, not just engines, at the factory. But he believes the local economy has to move beyond its dependence on automotive jobs.

“When you base your whole economy on one industry and it pulls out, it hurts,” he says.

Burkhalter could be speaking about his personal experience. After working at the Saturn plant for 18 years, he was laid off in 2008.

“It was by far the best place I worked in my life,” he says, but his career ended after a round of corporate cost cutting.

Both of his grandfathers worked for GM, he says, but the days when generations of a family could depend on jobs with the company are over.

His son-in-law works in the industry, but not for GM, says Burkhalter. He works in Smyrna, building Altimas for Nissan.