August 27, 2014 / 9:34 PM / in 3 years

Exclusive: GM moving some production between Mexico and Tennessee

DETROIT (Reuters) - General Motors Co is shifting some production of the Cadillac SRX from Mexico to Tennessee, but will partly offset that by moving some Chevrolet Equinox manufacturing from Tennessee to Mexico, an industry source told Reuters.

The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009. REUTERS/Jeff Kowalsky/Files

GM announced the Cadillac move on Wednesday at its Spring Hill, Tennessee plant outside Nashville, but declined to comment on the Chevrolet move.

A GM spokesman said the production changes at Spring Hill likely would result in the creation of more U.S. jobs but declined to say how many.

UAW President Dennis Williams said in a statement that the shift of Cadillac production from Mexico to the United States “is a big victory” for collective bargaining.

The UAW declined to comment on the report that GM planned to shift some production of the Equinox, a crossover vehicle, from Spring Hill to Ramos Arizpe, where the SRX, also a crossover, currently is built, when both models are redesigned in 2016-2017.

GM said the current SRX will continue to be assembled in Ramos Arizpe for an unspecified period of time after the new SRX begins production in Spring Hill

GM said a year ago it planned to invest $350 million in the Spring Hill plant, which was built originally for GM’s now-defunct Saturn brand. At the time, GM said the Spring Hill plant would be retooled to build two new midsize crossover vehicles.

The plant is expected to begin building replacements for the SRX and the GMC Acadia, beginning in mid-2016, according to a source familiar with GM’s plans who spoke on condition of anonymity.

On Wednesday, GM said it will invest another $185 million to build a new class of engine in Spring Hill. The engine plant will retain about 390 jobs, GM said.

The retooled vehicle assembly plant will require about 1,800 hourly workers, GM said.

The Spring Hill complex currently employs just over 2,000 hourly and contract workers in vehicle and engine assembly, stamping and molding operations.

The Equinox is expected to be redesigned about a year after the SRX, the source said. GM plans to build the next-generation Equinox, along with a replacement for the GMC Terrain, another crossover, in Ingersoll, Ontario and Ramos Arizpe, according to the source.

During contract talks in 2011, concessions granted by the UAW to GM before the automaker’s 2009 bankruptcy, including the establishment of a two-tier wage system, helped GM decide to make the Equinox at Spring Hill instead of producing it in Mexico. A hallmark of the four-year agreement signed in 2011 was new work at several plants, including Spring Hill, instead of raises for veteran union auto workers.

GM suspended production of autos at Spring Hill in 2009. The plant continued to operate at reduced capacity as an engine plant until 2012 when GM resumed building vehicles there.

The former Saturn plant was once the site of GM’s experiment with a more collaborative relationship with workers based in part on the model of Japanese automakers led by Toyota Motor Corp.

GM scrapped the Saturn brand in 2009. By that time, Saturn production had been already shifted away from Spring Hill.

Reporting by Paul Lienert and Bernie Woodall in Detroit; Additional reporting by Veronica Gomez in Mexico City; Editing by Jonathan Oatis

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