GM Selects Michigan Plant To Build New Small Cars
June 26, 2009
By Michelle Krebs
DETROIT -- General Motors selected the Orion Township, Michigan, assembly plant to build its all-important future small cars that represent "the fastest-growing segments in both the U.S. and around the world," Troy Clarke, GM North America president, said in a media conference call Friday.
Clarke wouldn't flat-out confirm what models will be built at the plant, but it appears the plant's primary product will be derived from the next-generation Chevrolet Aveo (also sold now as the Pontiac G3 and currently built in Korea by GM-Daewoo) with some production of the Chevrolet Cruze also possible at the facility.
Clarke insisted the widely speculated Chevrolet Spark, an A-class size that is smaller than the Aveo and Cruze, will not be made at the plant.
Clarke said the Michigan plant will mostly produce the subcompact B-segment car. He said the new model will be derived from the next evolution of GM's current B-size car platform. "It will be similarly sized but this product will bring something different from what we've seen .... It'll have legs of its own."
Clarke said GM will spend $600 million to $800 million to retool the plant next year for annual capacity of 160,000 vehicles, and it will be configured so it has the flexibility to produce the subcompact as well as a car that is one-size larger, a C-size car a la the Chevrolet Cruze.
The Michigan plant will focus mostly on the B-size car, while the Lordstown, Ohio, plant, currently being retooled, will be the primary source of the Cruze, Clarke said. He added that the Ohio plant will have a lot of capacity to build the Cruze, with the potential for being a three-shift plant. However, if demand requires it, the Michigan plant could chip in with even more Cruze capacity, an assumption GM clearly is making.
"We're thinking the B-car will sell north of 100,000 vehicles," said Clarke, noting GM sells only about 40,000 Chevrolet Aveo models a year now. "We're thinking this segment will grow because of higher fuel prices as well as the attractiveness and utility of the vehicle."
As part of GM's effort to be "the greenest car company in the world," Clarke predicts the new model will be "more and more toward the sweet spot of the market" in a year or two of production.
The Orion Township, Mich., plant, located in the Detroit suburbs, assembles the Pontiac G6 sedan, which will be discontinued when the entire Pontiac division is eliminated at year-end. It also makes the Chevrolet Malibu, production of which likely will be consolidated at GM's Kansas plant that is the primary source for the popular midsize sedan.
The Michigan assembly plant will be closed in September; retooling will start next year. In addition, GM will revamp a nearby stamping plant to produce parts for the new models. In total, the two plants will employ 1,200 people.
GM had agreed to bring production of the small car to the U.S. from overseas in exchange for wage concessions from the United Auto Workers union.
The Michigan plant won out for the small-car production over plants in Spring Hill, Tenn., and Janesville, Wis.
The Spring Hill plant, built in the 1990s to produce Saturn cars exclusively, could return to production if GM finds a need, although that seems unlikely. It now makes the Chevrolet Traverse, which will be moved to a plant near Lansing, Mich., that makes its sibling models, the Buick Enclave, GMC Acadia and the Saturn Outlook. GM has offered buyouts to Spring Hills nearly 3,000 workers; they have until July 24 to decide if they will accept the offers.
The Wisconsin plant, which made trucks, was idled in December and will be permanently closed.
Photo by GM
The Chevrolet Cruze will be made in Lordstown, Ohio, but the Michigan plant could produce them as well if demand requires more.
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