GM To Build 160,000 New Small Cars in U.S. as It Aims To Hit 2015 CAFE Goal

GM To Build 160,000 New Small Cars in U.S. as It Aims To Hit 2015 CAFE Goal

By John O'Dell May 29, 2009

General Motors Corp., which was going to import a new subcompact car called the Chevrolet Spark directly from China when it goes on sale in 2011, now says it will build them, and at least 100,000 more new small cars each year, in the U.S.

The decision is being billed as a concession to the UAW to get the autoworkers union to sign off on GM's reorganization plan, and that's likely true.

But we suspect it also is part of GM's response to new federal fuel-efficiency standards and the Obama administration's push to wring more small car production out of the U.S. auto industry - now mostly in thrall to the federal government because it is supplying both GM and Chrysler the cash they need to stay in business.

Whatever the reasons, GM now says it will build up to 160,000 new small cars at a previously shuttered plant that it will reopen and dedicate to small-car production.

The automaker isn't disclosing the location of the plant yet. There are many shuttered locations to choose from and the company probably is asking the various communities to vie for the jobs a plant reopening will bring by offering tax breaks and other concessions that will help cut GM's operating costs.

Nor is GM saying which cars will be built at the plant.

We believe the Spark will be one - but as GM was only planning on annual U.s. sales of 50,000 of the three-door hatchbacks, we expect at least one, maybe two other compacts or subcompact models will be built there.

One candidate is the Chevy Beat, shown as a concept at the 2007 New York Auto Show. While the production Spark is based on the Beat, GM could offer both by making some exterior styling changes and varying engine offerings and interior trim.

GM also has shown a five-door version of the Spark and, at the same show the Beat debuted, offered two other subcompact concepts (right) with SUV and retro van styling (a la the Chevrolet HHR)

The Honda Fit-sized Spark is set to go on sale in Europe next year with 1.0- and 1.2-liter turbocharged gas engine choices, both reportedly capable of achieving the U.S, equivalent of 47 miles per gallon.  We've no idea of the engine choice GM will make for this market.

It once was that cars sold here always had bigger engines, and lower fuel economy, than their European and Asian counterparts, but that may be changing now that Obama has said passenger cars in the U.S. have to average 39 mpg by 2015.

Also changing is GM's attitude. The company's top officials have long held that U.S. automakers cannot profitably build small cars in the U.S because Americans wouldn't buy them in sufficient volume.

But in a statement issued earlier today, GM's chief executive officer, Fritz Henderson, said small cars now "represent one of the fastest-growing segments in both the U.S. and around the world."

GM already builds the compact Chevrolet Cobalt and Pontiac G5 at a plant in Lordstown, Ohio, and it plans to retool the plant to start making their successor, the Chevrolet Cruze compact, next year.

John O'Dell, Senior Editor

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Check out Edmunds AutoObserver's take on GM's small car plan.

John O'Dell:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.