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GM Suspends Volt Engine Plant Construction

chevy-voltGeneral Motors (s GM) 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 (s TM) said on Monday it will stop work on a Prius plant in Mississippi whose construction is 90 percent complete.

14 Responses to “GM Suspends Volt Engine Plant Construction”

  1. Frankly speaking, it’s a pity for me that GM is in such a bad situation. I really like the cars they make and they are automobile builder with great brands and tradition – something like a symbol of America. The government shouldn’t let em just die!

  2. Roi Tauer

    I have heard, but am trying to confirm, the GM VOLT
    body and drive train will not be built in the USA.

    If so, why would we be giving money to GM, so they can build these in China?

    We need jobs here. This money is to rebuild the US economy.

  3. Even if GM goes bankrupt, they’ve come far enough forward with the Volt project that it has become an asset (the plant is already designed, the specs and timeline laid out, etc). It is highly likely that whoever purchases GMs assets will go forward with the project and position themselves to take advantage of the market. Just because many people in the USA can’t get car loans today, doesn’t mean they won’t be getting loans and buying cars next year or the year after.

  4. I think both stories illustrate the fundamental issue here– cost and schematics of building electric cars.

    The combustion engine factory system cannot easily switch to scalable/modular electric motors and energy storage devices like batteries and fuel cells.

    This is the real challenge for the auto industry— and I think GM is making the right move by expanding its partnership in Asia – where the energy storage industry is more likely to bloom.

    Still optimistic about death of combustion engine, but assume it’ll take 20-40 years, so patience will be key!!!

    Thanks for post!

    Garry G
    Editor, The Energy Roadmap