General Motors hopes to clinch an agreement with the UAW within 90 days to build two assembly plants in the United States.
The plan, dubbed Project Yellowstone, is to find a way to build GM's next-generation Delta compact cars profitably.
GM hopes to cut the cost of its small cars by 20 percent by building an innovative industrial area of suppliers around each assembly plant.
The automaker already has chosen suppliers, narrowed its list of sites and begun talks on road improvements with local government officials, said Mark Hogan, GM's general manager of North American Operations small car group.
At this point, the biggest remaining question mark is the UAW. GM wants to cut its work force and use more efficient work practices in assembly plants.
'I am guardedly optimistic,' Hogan said last week in an interview with Automotive News. 'We have started the heavy lifting, but we haven't come to an agreement yet.'
Hogan was scheduled to spell out his vision of Project Yellowstone during a speech today, Jan. 11, at the Automotive News World Congress in Detroit.
GM developed some of Yellowstone's production concepts at its Blue Macaw plant in Brazil, which will begin production of a small car in August or September.
Blue Macaw was intended to shave about $3,000 from the retail price of a Corsa, a small car GM builds around the world, Hogan said.
With suppliers playing a bigger role in North America, Hogan said, GM can build assembly plants for $400 million each - significantly less than a traditional plant. If the UAW agrees to cut costs, GM likely would locate Yellowstone plants in Lordstown, Ohio, and Lansing, Mich., Hogan said.
However, he said GM could build a Yellowstone plant in Mexico.
Hogan said the two Yellowstone plants could be built on greenfield sites, replacing the current assembly plants in Lordstown and Lansing.
The Delta platform will spawn a family of small vehicles, including the Chevrolet Cavalier, Pontiac Sunfire, a Saturn sedan, a Saturn sport-utility and the Opel Astra.
A third Yellowstone plant could be located somewhere in the United States to produce GM's Epsilon world cars, which include the next-generation Chevrolet Malibu, Pontiac Grand Am, Oldsmobile Alero and Saturn L sedan.
According to GM spokesman Vince Muniga, GM could produce either the Delta or Epsilon cars in Lansing.
DECISION MUST COME SOON
GM will need 30 months to build the plants and prepare for Delta production.
Given its plans to introduce the first Delta car in 2002, the automaker must decide soon where to build its two Delta plants.
'We can move pretty quickly,' Hogan said. 'We need to get going.'
Labor costs account for 20 percent of Yellowstone's projected savings. Modular assembly and cheaper material costs account for 80 percent.
To keep costs low, GM has designed Delta to be assembled from 15 component modules delivered by suppliers.
For example, UT Automotive will deliver an instrument panel that can be snapped in place within three minutes. A traditional instrument panel would have required a 22-minute installation.
The plants will operate on a three-shift plan, producing 40 cars an hour. Total production would be 200,000 vehicles per plant.
The Delta car would require 16 to 18 hours of labor, comparable to the best North American plants.
GM expects to employ 2,000 workers in each assembly plant, significantly fewer than work in Lansing and Lordstown today. GM thinks it can downsize the work force through attrition, not layoffs.
This is a major issue for the UAW. In Lordstown, UAW Local 1112 counts 5,400 hourly workers in the assembly plant.
The UAW would have an opportunity to represent suppliers near the new plants.
GM also wants to reduce the number of 'noncore' workers. That means fewer janitors and maintenance staff for such jobs as cutting grass and removing snow.
Officials of Local 1112 say they believe they can reach an agreement with GM.
The company could cut its payroll through a combination of buyouts, early retirements and placement of workers in GM's jobs bank, said Jim Graham, president of Local 1112. Said Graham: 'As long as our membership is taken care of, we don't have a problem with that.'