Alexander Alusheff

Lansing State Journal

DELTA TWP. – General Motors officials have promised that Lansing Delta Township Assembly will remain "full," even as production GMC Acadia leaves for Tennessee.

They haven't said what might take it's place.

But the plant is gearing up for something. GM has invested $580 million in the last few years for expansion, retooling and new equipment.

Several auto analysts believe it's gearing up for a new Cadillac crossover.

“Cadillac is looking to add crossover products above the XT5 and below, and I suspect Lansing will be getting one of these products,” said Alan Baum, principal of Baum and Associates, a West Bloomfield company that provides automotive forecasts.

The XT5, which will hit dealerships this spring, is Cadillac’s second crossover. It will replace the SRX crossover and is nearly 300 pounds lighter. The XT5 is built at GM’s plant in Spring Hill, Tennessee, which will produce the 2017 Acadia. The Acadia has been made in Lansing since 2005.

Acadia production leaving Lansing, but jobs won't leave

But Cadillac announced last year that it would release four new utility vehicles. The XT5 is only one of them.

“SUVs have never been as popular as they are now, and Cadillac is struggling to sell sedans recently,” said Karl Brauer, senior analyst at Kelley Blue Book. “It’s been a longtime rumor that Cadillac will offer an alternative to the Escalade.”

Baum and Brauer said that it is likely that one of the three remaining crossovers will be built at the Lansing Delta plant.

The crossover and SUV segment has grown rapidly in the last few years. In the last year alone, GM’s light truck sales, which include crossovers and SUVs, grew 16 percent, according to Motor Intelligence. GM’s car sales decreased 14 percent.

Cadillac sales followed a similar trajectory. Deliveries for the Lansing-built ATS and CTS, dropped by 10 percent and 27 percent respectively. Its other sedans, the ELR and XTS, declined by 21 percent and 5 percent.

Meanwhile, SUV sales were up. Deliveries of the Escalade increased 9 percent, while Escalade ESV deliveries jumped 33 percent. SRX deliveries grew 28 percent.

“The market will remain strong,” Baum said. “The utility vehicle is superior to the sedan because its higher driving position … and it’s still gets good mileage because it is on a car platform. I expect them to do very well in the future.”

The Lasing Delta plant also produces the Chevrolet Traverse and Buick Enclave, which together account for 75 percent of the plant’s production. It will continue to make the 2016 Acadia and Acadia Denali through their life cycles.

The 2016 Acadia will likely stop production in March 2017, said analyst Mike Wall of IHS Automotive in Grand Rapids. When the 2017 Acadia launches sometime this spring, the 2016 models will be sold as fleet vehicles to private companies and government departments, Wall said.

Lansing Delta employs 3,486 people and local GM officials said previously no jobs will be cut in the near future from the loss of the Acadia.

Demand for the Traverse and Enclave are high enough that the plant can continue to operate at three shifts when Acadia production halts, said Mark Reuss, GM’s senior vice president of global product development, during his presentation at the Lansing Regional Chamber of Commerce’s Economic Club luncheon in East Lansing on Tuesday.

Exec: Lansing-built vehicles laying groundwork for GM's future

Traverse deliveries increased more than 15 percent in 2015 from 103,943 units to 119,945. Enclave deliveries remained flat in 2015 at 62,000 units. The Acadia, however, had its strongest year ever in 2015 with 96,393 deliveries, up 14.8 percent, according to data from GM.

When installation of tooling and equipment is complete next year at Lansing Delta, there could be enough time for the plant to produce a Cadillac crossover for the 2018 model year, Baum and Brauer said.

When asked what might replace the Acadia, Reuss declined to comment.

“We don’t have any announcement, but we are fully committed to Lansing,” he said. “We’ll see how those two vehicles do.”

Contact Alexander Alusheff at (517) 388-5973 or aalusheff@lsj.com. Follow him on Twitter @alexalusheff.