The News Journal from Wilmington, Delaware • Page 3

SaflyiTOT) ComrDDiracfl To Boxwood WEDNESDAY, AUG. 7, 1996 THE NEWS JOURNAL A3 beneit Only a few tangential businesses will. Car's success may spur growth "It'll at least maintain a level of business for those who currently provide services to the plant." Robert W. Coy director of the Delaware Economic Development Office. pliers and in the plant itself.

Other than the seat manufacturer, no automobile parts suppliers light bulb, seat belt, air bag, console, engine block and brake manufacturers have shown interest in setting up shop here, although the state development office plans to approach them, Coy said. "With car manufacturing, there's an evolution," said Frank Hampshire, director of research with the Motor and Equipment Manufacturers Association in North Carolina. "If there's not an existing plant there as was the case with the Mercedes plant in Arkansas, then a number of sup- pliers might build." -r Even seat manufacturers, such i as Douglas Lomason, will use the local operation for final assenvi bly and upholstery, he said. "Short term, this will have very little impact on suppliers," Hampshire said. "Long term, it's strongly linked to the success of the particular vehicle." Should the new Saturn become' a big seller, parts suppliers could consider increasing capacity.

At that time, Delaware could become an attractive site, he said. "It's kind of like a magnet. Un less it has a lot of iron ore, it's not going to pull very hard." glas Lomason. Farmington Hills, Douglas Lomason is in a joint venture with Keiper Recaro Enterprises Inc. of Germany to make seats for the Saturn.

But while it's a nice job for Sills, the new car venture doesn't presage an economic boom for local vendors. Because the Boxwood Road plant has been in operation for 50 years, most operations are already in place, said Robert W. Coy director of the Delaware Economic Development Office. By MAUREEN MILFORD Staff reporter David M. Sills' business is bricks and mortar, not engine blocks, but he's already cashing in on the new Saturn to be built at General Motors Boxwood Road plant.

Last spring, Daystar Sills a Newport general contracting and construction management firm, landed a contract to build an warehouse in New Castle for seat supplier Dou "It'll at least maintain a level of business for those who currently provide services to the plant," Coy said. A report issued by the state-created General Motors Task Force in 1993 said if the plant had closed, layoffs among local vendors most of whom are in wholesale and retail trades would have been less than 4 percent of the total vendor employment base. Those that stand to gain from the new Saturn will be construction companies, like Sills', which will provide services to parts sup Unlike Del. got Saturn for free A history of General Motors Corp. 's Boxwood Road plant: 1 945: GM plans new factories to meet postwar 1 demand.

Ten years of pleas by Wilmington Cham- ber of Commerce pay off when GM decides to build at Boxwood Road near Newport. The DuPont which began diversifying its holdings during the early 20th century, owns 23 percent of GM's stock. 1946: nam Duiit on 185 acres for $9.5 million. 1947: Eight black Pontiac Streamliners are the first to roll off the line Oct. 6.

With 800 employees," the plant builds 40 Streamliners and Oldsmobile Dynamic Cruisers per hour. 1 948: The plant's 1 ,700 employees pump an estimated $1 0 million yearly into the local economy. In the next 1 5 years, the plant builds the Pontiac Bonneville and Grand Prix, the Olds 88, the Buick LeSabre and others. Because of the DuPont connection, the Boxwood plant hosts GM's annual stockholders meeting each spring through 1964. 1 950: Work force reaches 2,800.

Company sells 48 acres to a developer to ease housing shortage for employees. 1 955: Plant adds second shift; 4,400 workers build 60 cars per hour. 1 957: U.S. Supreme Court orders DuPont to sell GM holdings in antitrust ruling. 4 By DALE DALLABRIDA Staff reporter Tennessee anted up more than $50 million to lure a Saturn plant 10 years ago.

Delaware is getting one practically for free. States have increasingly used subsidies, tax breaks, low-cost loans and outright grants as tools to attract or keep manufacturers of all kinds. In 1986, Saturn's plant in Spring Hill, got $22 million in state training funds and a $30 million parkway. But in Delaware, "we have not been asked to provide a single dollar in finan-. cial incentives," Gov.

Carper said Tuesday. The state is likely to provide some training money down the road something Delaware has often done when automakers retool. Two years ago, Carper offered $1 million to help train workers at General Motors' Boxwood Road plant for the new Malibu model, due to go into production early next year. "We will certainly offer to provide something similar" when the plant tools up for the new Saturn, Carper said. "We do have limited resources.

But on the other hand, we're grateful" to GM, he said. Little wonder. International Busi-' ness Machines Corp. last year agreed to keep its headquarters in New York only after the state forked over $13 million for three surplus buildings. Electronic equipment maker Raytheon Co.

threatened to leave Massachusetts earlier this year unless the state lowered its tax burden. It did. But even if Delaware could have matched the financial breaks other states offer manufacturers, it probably didn't need to. Boxwood Road was simply the most practical GM plant for the Saturn, said Steve Kosowski of industry analysts Au-toPacific Inc. in Santa Ana, Calif.

Re- vamping most of other GM plants, which build cars and trucks either larger or smaller than the new Saturn, A M. ni k. I i rot; nam Begins ounaing Chevrolets Impalas, caprices, tsei Airs as well ncRnirkc Plant nrnHnrnc a My U. r- mnnm 1W1 IliHl rara rnn. tributes $69 million to the state economy.

1 965: After years of declining employment, work force Special to The News JoumalPEYTON HOGE Phyllis Spiller works on Instrument panel assembly at the Saturn plant In Spring Hill, Tenn. Spiller, who formerly worked on a conventional GM assembly line In Michigan, says It took her five months to adapt to the Saturn approach to automaking. reaches 4,300. DuPont divests the last of its GM stock. Company shifts stockholder meetings to Detroit.

1971 Three millionth car is built at Boxwood Doii ft-n-iifi-ili 1 973: The plant lays off half of its 4,300 work- arc qc rort ri nrmrnri kiAa itKarUo Cnom rrl sis ends Buick production. Another factor in Delaware's favor was the company's delicate give-and-take with unions. Foreign automakers looking for a plant site may openly pit states against each other to bid up incentives, Cochrane said, but GM wouldn't want unions to make such decisions the subject of labor negotiations. Saturn spokesman Jim Farmer confirmed Tuesday that the company had not asked for financial help from Delaware. competition for the Saturn.

"It's hard to say whether there were negotiations with other states," said Steven Cochrane, economist at Regional Financial Associates Inc. in West Chester, Pa. "If so, they Were quiet." Boxwood Road has other attractions for analysts said: a productive work force, good labor relations and low business costs. The plant's infrastructure roads, railways, utilities is in solid shape, Carper said. would have been too expensive, Kosowski said.

The Saturn has enough in common with the Corsicas and Berettas once built in Delaware and the soon-to-be-produced Malibu to make retooling Boxwood Road affordable, he said. Expanding the Spring Hill plant also would be costly, said Todd Grieco of the Eddystone, WEFA Group of economists. In fact, Delaware may have had little 1975: Plant retools for Chevrolet Chevette, GM's first small car. Boxwood Road builds 70 Chevettes per hour until 1 1980: Employment at the plant exceeds 4,700. 1983: GM marks its 75th year, the Boxwood Road plant's 36th.

1984: Retooling to build Olds Delta 88; last of 2.2 million Chevettes rolls off line. Stalled contract talks spark a six-day walkout by 4,000 United Auto Worker members. 1986: Production stops Feb. 4,800 idled as robot welders are installed as part of a $311 million retooling effort to make the Chevrolet cars Labor: Teamwork key Delaware Technical Community College as part of a $1 6 million program. The first car comes off the line Oct.

6. Assembly stops so employees can watch. Plant employment hits 5,200. 1 989: Slow sales force the plant to cut 450 jobs, the first such layoff in 10 years. 1991: The plant builds its 7 millionth vehicle, a white Beretta, May 1 GM stops making cars at its Linden, N.J., plant, shifting the wont to Delaware.

1992: Boxwood Road escapes the ax in an early round of GM plant closings in February. Plant builds its millionth car. in December, however, it's among seven GM plants around the country targeted for closure. 1993: Gov. Carper convenes a task force, headed by former DuPont Co.

Chairman Irving S. Shapiro, to come up with options to save the plant. A grass-roots effort by a small group of GM workers to buy the plant comes up short. 1994: GM announces in March that it is considering developing a new small car that would be built at Boxwood. Company announces that the plant will become an overflow facility for production of a new Chevy Malibu.

1995: GM officials decline to respond to reports that automaker is considering building a new Saturn at the Boxwood Road plant. In April, UAW workers at the plant approve a flexible contract similar to one in place at Saturn's Spring Hill, plant. In May, GM holds its annual shareholders' meeting in Wilmington, its first in Delaware in more than 30 years. Saturn: Del. gets the job FROM PAGE A1 A top Saturn official was appointed head of the Boxwood Road facility in April.

But the decision hinged on GM's board of directors, who decided Monday the new Saturn project, code named Innovate, was a go. The company's decision to make a midsize Saturn is aimed at keeping young buyers from moving to other cars as they grow older and have kids. "I was scared to death until it was approved by the board," said Boxwood Road plant manager Harvey Thomas, who once ran Saturn's GM's Spring Hill, plant. Boxwood Road will be only the second Saturn plant in the nation. GM officials would not offer specifics on what renovations are needed at Boxwood, but if GM decides to pattern its production after Spring Hill, it could mean a major revamping.

The new car will resemble Saturns now on the market, but will be larger. It will based on the platform of GM's Opel Vectra, which is sold in Europe. The new Saturn will be designed for a more upscale market and industry analysts say its price could be as much $10,000 more than the current for Saturn models, which range roughly from $11,000 to $15,000. About 65 percent of Saturn customers are now women, and Farmer said the demographics may shift a bit with the new vehicle. The car will use a 2.2-liter, dual overhead cam engine produced at GM's Tonawanda, N.Y., engine plant with engine blocks and head produced at the company's Massina, N.Y., facilities.

GM officials would not comment Tuesday on how many Saturns will be built at Boxwood, but John Peronti, a GM environmental Thomas said. The training will continue when Saturn production begins in 1998 or 1999. Saturn workers in Spring Hill now get about 90 hours of training a year. While Boxwood workers can expect an environment similar to Spring Hill, not everything will be the same. There are some differences between the nontraditional Spring Hill labor contract and the Boxwood contract, which remains under the auspices of the national UAW agreement.

Workers in Tennessee have a provision in their contract that means 10 percent of their yearly pay is subject to the success of Saturn. That means they can either lose 10 percent or add 10 percent to their yearly pay. Last year, Farmer said workers got $10,000 above and beyond their pay because the company was profitable. Boxwood Road's contract does not include the so-called risk-reward clause, but Farmer said workers there may eventually want to adopt such a policy. Also, UAW Local 1853 in Spring Hill works closely with management and is involved in business decision-making at the facility.

While Boxwood union officials plan to work closely with management when necessary, Joe Brennan, Local 435 president, said he is happy the plant remains under the national agreement because it shows that his members have the support of the international UAW in Detroit. FROM PAGE A1 "The baby has been born and now we have to nurture it." On the assembly line at the Saturn plant in Spring Hill, workers seem to be living the philosophy. They work side by side and hold meetings to discuss how to work more efficiently. For some Spring Hill workers, adjustment was required after the plant opened in 1986. Phyllis Spiller, who used to work on a GM assembly line in Michigan, says it took her five months to acclimate.

"I used to report to foremen and supervisors walking around in white shirts," recalled Spiller, who now says she loves her job. The workers at Boxwood have had time to think about the change, which has been expected for months. Last year, the members of Boxwood's Local 435 of the United Auto Workers ratified a new more flexible labor contract that opened the door to the team concept. It calls for workers to learn multiple jobs and work as a team, solving problems and assisting one another in making the assembly line run smoother. "It will be a total partnership," said Harvey Thomas, Boxwood's plant manager and a key player in forming the Saturn philosophy in Tennessee.

Intensive training, he added, will be the key to bringing the Saturn way to Delaware. Workers at the facility, which will shut down to retool for production of the new Chevrolet Malibu, will get about 100 hours' training before the plant reopens in January, The News Journal GINGER WALL Harvey Thomas, the Boxwood Road plant manager, formerly managed the Tenn. Saturn facility. engineer at the plant, said in June that initial estimates are about 250,000 a year. Boxwood produced 222,000 cars last year.

The seeds of the original Saturn concept were sowed in the early 1980s when GM was looking for a new vehicle to challenge imports. Saturn Corp. was formed as a wholly owned subsidiary of GM in January 1985 and in July of that year GM chose Spring Hill, to build the new vehicle. In the fall of 1990, the first Saturn debuted, built with a process unusual for the U.S. auto industry, team manufacturing.

Saturns have become one of the nation's top-selling vehicles and analysts have said for some time that GM would have to expand the product line to keep the momentum going. Boxwood Road employees will now have to carry the Saturn torch further. "We worked for this. Everyone in this plant sweated and worked hard to show GM we deserved to get something else in this plant," said Joe Riccio, of Local 435 of the United Auto Workers, which represents Boxwood workers. "When they said they were closing the plant we didn't roll over.

We dug in our heels and worked harder." When Saturn production begins, the plant will employ about 2,600 people, and will need to add about 200 jobs at that point. 1996: An 18-day strike at an Ohio parts P3 SATLRN plant in March shuts down most GM production, including the Boxwood Road plant. Harvey Thomas, a top official at Saturn's Tennessee plant, Is named manager of the Boxwood Road plant in April. That month, GM announces a $50 million retrofit of the plant's paint shop. August: Production of Chevrolet Beretta ends; Corsica production ceases Friday.

On Tuesday GM announces it will produce a new model Saturn at the plant. Production on the midsized Saturn Innovate is 1 mm -i, expected to begin in 1999. Ti rr "I was scared to "Groups have been coming in saying 4 "We have not been asked to provide a single dollar it "It's a weight off your shoulders. It's a whole new concept and we're ready." A 4 in financial wasao-proveaby the board." DUUQing another car." JLi i -I 1 1 --1 n- mbmJ; rZZ: Steve Kalogiros, owner of Party izza Gov. Carper Plant manager Harvey Thomas- Dean Voshl, plant employee.