GM is bringing back Spring Hill for a song
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What's noteworthy about the return to action of General Motors' Spring Hill, Tenn., assembly plant is just how little it is costing.
For $61 million, Spring Hill will come back to life -- after being idled in 2009 -- making a vehicle it has never produced before, the Chevrolet Equinox.
That's peanuts. A new factory costs a billion dollars or more these days. Overhauling a factory for a new purpose runs around $700 million. Retooling for a model change -- maybe half that, depending on the project.
But $61 million?
How? GM says it re-purposed Spring Hill back in 2006 precisely for this reason – that is, to be able to some day pivot flexibly and inexpensively from one product to another. GM spent $700 million at that time to enable Spring Hill to change from building little Saturns to producing roomy Chevy Traverses.
But that $700 million did more than that: It set up Spring Hill for virtually anything GM wanted to build there in the future.
Unfortunately, historical events inserted themselves into the equation, and GM was forced to turn off the lights at Spring Hill assembly.
But now – voila – it's the future. The lights have come back on and Spring Hill will do exactly what it was designed to do. Pivot.
Granted, a second unidentified model will be added to Spring Hill in 2013, and GM will spend much more to put that vehicle into production there – but only $183 million.
Compared to what GM, or the rest of the auto industry, for that matter, used to routinely spend on retooling and changing product lines, even $183 million is peanuts.
The Spring Hill plan is the embodiment of the low-cost "flexible factory" strategy that industry visionaries have described but scarcely had reason to use over the past decade.
How noteworthy that it took the financial collapse and restructuring of GM to put the plan into play.
You can reach Lindsay Chappell at email@example.com.