GM Suspends Volt Engine Plant Construction

chevy-voltGeneral Motors has put the brakes on construction of a $349 million plant slated to produce engines for the extended-range electric Chevy Volt and compact Chevy Cruze in Flint, Mich. by 2010. According to the Flint Journal, preliminary surveying, property security, and underground work on the site has already been done since GM unveiled plans for the plant less than three months ago.

“It’s temporarily on hold as we assess our cash situation,” GM spokesperson Sharon Basel told the Detroit Free Press today. “I don’t think it’s a surprise that we’re studying and reviewing everything given the position we’re in.” Nor would it be a surprise if GM is using the Flint plant for leverage in its emergency loan negotiations with the White House, as suggested on the GM-Volt blog today:

There are now less than 10 business days left in this month of December that GM said it would be out of cash by the end of without a federal loan.

It may very well be up to President Bush and Treasury Secretary Paulson to decide whether the Volt will make it in November 2010 as we’ve all been waiting for.

Basel told MSNBC she didn’t know if the Volt assembly plant in Detroit-Hamtramck would also be delayed. She emphasized that the company still plans to roll the fuel-efficient Chevies into showrooms by 2010, and said a small engine factory in Austria is one of “lots of options” GM has for producing the Volt and Cruze engines. Flint Mayor Don Williamson said in the local Journal that GM may use an existing plant in Flint to save $150 million compared with the $370 million investment required for the all-new facility.

In the meantime, GM opened its eighth vehicle plant in China and and ramped up production of Chevrolet Aveos in Mexico this week. But it’s not the only company pausing green vehicle projects. Factory construction for another electric car, Tesla’s Model S, is also on hold pending government aid. And facing its first sales decline in 13 years, Toyota said on Monday it will stop work on a Prius plant in Mississippi whose construction is 90 percent complete.

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