The loss of Oldsmobile from the U.S. auto-making town of Lansing, Michigan will have minimal effect as suppliers move in to support two new General Motors assembly plants, the Detroit News reported this week.
According to the newspaper, the two new factories, projected to cost $US1.6 billion, will produce a variety of vehicles over the next three years. On top of that, there should be further investment in a $US70 million upgrade of the low-volume Lansing Craft Centre to produce the Chevrolet SSR sports car.
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With GM looking to farm out more of its parts business, suppliers have been scouting the region in recent months for locations that would permit 10-minute deliveries of steering wheel columns, seats and other components. The vehicles include U.S.-made replacements for the present Opel-built Cadillac Catera, a new Chevrolet Malibu and several yet-to-be-announced models, the paper said.
Suppliers which have bought land or have a facility under construction include Delphi, Magna International, Tower Automotive, Tire & Wheel Assembly, Comprehensive Logistics and Custom Transportation. Delphi has secured two sites, one of which recently opened.
“Most of the suppliers are locating in the suburbs around Lansing, and we’ve been assisting smaller suppliers with locations in the city,” Doug Rubley, Lansing’s deputy finance director, told the Detroit News. “There’s been tremendous cooperation among the various communities, because you can’t survive by yourself.”
The Detroit News said that, by 2020, the GM plants are expected to be the catalyst of 18,000 new jobs in the region, with another 31,000 jobs slated for the state, citing an economic impact study by the Institute of Labour and Industrial Relations at the University of Michigan in Ann Arbor.
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By GlobalDataThe study takes into account the possible closing of two GM plants in Townsend and Verlinden, though the automaker has not yet decided what to do with the facilities.
About 80 percent of the new jobs are in non-manufacturing functions, including business, professional and repair services, retail activity, housing, finance and trucking, the Detroit News said.
“We’ve always had a good industrial market in and around Lansing, but it’s become a lot busier in the last six months,” Robert Cullum, marketing associate of Lansing real estate firm CB Richard Ellis/Martin, told the newspaper.
“Historically, Lansing’s economy has been built around Michigan State University, Oldsmobile and the state of Michigan. Now things are getting more diversified, and I don’t think anyone understands the impact of the GM deals yet.”
While GM announced last month that it would phase out its Oldsmobile division over the next few years, the impact on Lansing will be minimal, Rubley told the Detroit News.
The division moved out of the city two years ago when GM began to consolidate its 37,500 salaried workers in southeastern Michigan into six employment campuses, the paper said.
