GM to build new assembly plant, first in 14 years

Cadillac facility in Lansing, Mich., will employ 1,500

Motor vehicles

February 01, 2000|By BLOOMBERG NEWS

DETROIT -- General Motors Corp., the world's largest automaker, said it will build a $558 million Cadillac assembly plant in Lansing, Mich., its first new U.S. factory in 14 years.

The plant will produce annually more than 200,000 luxury vehicles, such as the Cadillac Catera, and employ 1,500 workers within three years. The move comes after a record sales year for automakers, with U.S. consumers buying 16.96 million cars and light trucks in 1999.

The factory, scheduled to open next year, is designed to let GM switch to other models on short notice as consumer tastes change. The plant will incorporate such cutting-edge technology as Web cameras mounted on smokestacks, which will allow executives to follow construction progress over the Internet.

Borrowing from ideas refined in plants overseas, the factory also will house a body shop with the ability to switch between making one-piece car frames and the body-on-frame technique used to make trucks.

GM said the new Lansing Grand River plant will draw on the flexible and lower-cost manufacturing techniques developed in Eisenach, Germany, as well as in Poland, Brazil, China and Thailand.

The decision to build the plant comes after a 2 percent sales decline at the Cadillac Division in 1999, when luxury imports surpassed both Cadillac and Ford Motor Co.'s Lincoln for the first time.

"Cadillac would like to at least stop the bleeding and get some sales growth," said Ron Harbour, president of Harbour & Associates, an automotive consulting firm in Troy, Mich.

The Lansing Grand River assembly plant is GM's first all-new U.S. assembly facility since it built its Saturn plant in Spring Hill, Tenn., in 1986, which, after 1999, was the second-best year for U.S. auto sales.

The automaker scrapped a plan to use outside suppliers to make entire sections of cars, which would have cut the number of GM workers and hurt its relations with the United Auto Workers union.

The local and international unions were involved in designing the plant to be more efficient, "a good example of what we can do when we work together," said G. Richard Wagoner Jr., GM's president and chief operating officer.

GM shares rose $1.5625 to $80.5625 yesterday on the New York Stock Exchange. The shares have risen 8.4 percent in the past 12 months as the automaker recovered from two strikes in 1998.

The automaker is counting on an increase in luxury-vehicle sales in the next five to 10 years to keep the plant running, Harbour said.

GM's key objective in Lansing is to use lean manufacturing techniques developed since it built the Saturn factory. The technology in the Lansing plant could let GM build a car in less than 20 hours, Harbour said.

The plant also is GM's attempt to shed its reputation for bloated, old-school manufacturing and prove that it can build vehicles as efficiently as any other automaker in the world.

The Lansing complex will consist of three buildings, one each for assembly, paint and body work, which creates more perimeter space to shorten the distance over which parts must be transported to the assembly line.

"Material delivery is a real virtue of this layout," said Harbour, because it reduces the need for forklifts and other heavy material handlers, increasing safety and reducing assembly time.

Wagoner said GM has "really learned how to do manufacturing sites at lower cost than we used to."

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