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GM Picks Michigan Plants for Future Small Car

General Motors selected its assembly plant in Orion Township, Mich. and stamping facility in Pontiac, Mich., to build its future small car, which will add to the automaker’s growing portfolio of US-built, fuel-efficient cars, including the Chevrolet Cruze and Volt. Today’s announcement will restore approximately 1,400 jobs in total—1,200 at Orion Assembly and 200 at Pontiac Metal Center, Building # 14.

This decision is dependent on the successful outcome of ongoing economic incentive negotiations between GM and state and local government officials.

Small cars represent one of the fastest-growing segments in both the US and around the world. GM will be the only automaker, foreign or domestic, to build small cars in the US, and we believe Orion Assembly and Pontiac Stamping are well suited to deliver a high-quality, fuel-efficient car that competes with anything in the marketplace.

—Troy Clarke, president of General Motors North America

A selection team comprising leaders from several of GM’s functional areas, including manufacturing, labor relations and finance, made the final decision based on a specific set of criteria. Orion Assembly will be retooled and is anticipated to be a two-shift operation, building 160,000 cars annually—a combination of both small and compact vehicles.

As announced on 1 June, Orion Assembly will be placed into standby capacity status in Sept. 2009. Pontiac Metal Center’s Building #14 will be placed into standby capacity status in Dec. 2010. Pontiac Metal’s buildings #15 and #25 will close by Dec. 2010, or sooner depending on market demand. Timing for the retooling of the small car assembly and stamping plants is still under study, but GM anticipates this prep work would begin in late 2010 in anticipation of the start of production in 2011.

Two other GM assembly plants in Spring Hill, Tenn. and Janesville, Wis. were also under consideration to build the future small car. Spring Hill will be placed in standby capacity status in Nov. 2009, as announced earlier this month. The plant could be brought online at some point in the future should GM require additional capacity due to increased market demand. Janesville was placed on standby capacity in May 2009 and will remain in that status.

Currently, about 67% of GM cars and trucks sold in the United States are built there. With this announcement, GM anticipates that US production levels will increase beyond 70% by 2013, augmenting its US manufacturing footprint of more plants than any other OEM.

Comments

ToppaTom

“GM will be the only automaker, foreign or domestic, to build small cars in the US”
Apparently “small car” means Mini. How far is such a car in development?
“A selection team comprising leaders from several of GM’s functional areas, including manufacturing, labor relations and finance, made the final decision based on a specific set of criteria”
This is not very informative. As the decision is finalized I hope we (as part owners) will learn more.

ejj

I think this is just a "get by" measure until the economy truly recovers....when it does, people will go back to buying bigger cars & trucks IF gas prices remain stable.

ToppaTom

Probably so.
But which brands will they buy when prices go up?

danm

There is no way gas prices are going to remain "stable" when the economy recovers.
With all the new demand from china & india, they will be going thru the roof in a few yrs.
GM is looking at gas price trends and seeing (belatedly) that they cannot sell product unless it gets 40+ mpg.

ToppaTom

Why do you say “belatedly”.

The percentage of US sales, for cars that get 40+MPG or even 30 MPG is not high and never has been.

GM offers many models that get 30 mpg (Aveo, Cobalt, Malibu LTZ and Hybrid, HHR, Pontiac G3, G5 and G6,Pontiac Vibe, Saturn Astra 3-door and Aura XE and Hybrid and Vue Hybrid)

- in the US

- now.

ejj

Toppa: Kia, Hyundai, Nissan, Ford for small cars & for big SUV's and pickup trucks Ford, GM, Dodge, Toyota, Nissan. In Asia (esp. China) all the new Chinese brands will do very well. I think growth will be slow in Russia.

Remember we are in a period where OPEC has CUT production; they have a lot of capacity to spare. Iraq is getting ready to open up their oil fields on a scale never before seen with all the foreign oil players. Brazil (via Petrobras) is finding vast new reserves offshore to drill for that they will be tapping soon. In addition, the global economic recession has resulted in serious demand destruction for oil. So oil prices should be very stable and affordable for many years going forward - stifling attempts to deploy pev's & hev's on a large scale. When people are tightening their belts and thinking strictly along financial lines and whether or not their jobs are secure, the low cost standard ICE vehicle manufacturers win.

Multi-Modal Commuter Dude (formerly known as Bike Commuter Dude)

On stable fuel prices:

"...oil prices should be very stable and affordable for many years going forward - stifling attempts to deploy pev's & hev's on a large scale."

The only flaw I see in your otherwise very sound logic, ejj, is that you assume all the other existing oil reserves will continue along at current production levels. The Cantarell oil field is in the mega-decline phase (-15% per year or more), and nobody really knows what the SaudiAramCo situation is (perhaps not even the Saudis).

Even considering PetroBras' new oil discoveries (all of which are in deep water and very expensive to drill), we are still simply using oil at a much greater rate than we are replacing/offsetting its use.

Eventually (maybe not today, maybe not tomorrow, but soon, and permanently) we will have to face the spectre of a REAL oil shortage. Prices will not remain stable at that time.

ejj

Multi: Let's say demand starts to recover. With Iraq's oil fields and Petrobras deepwater reserves in full production, it will take even longer for OPEC to increase production back to pre-market crash levels. The new finds & Iraqi production will have a moderating effect on the speculators, who arguably were to blame for the major price spikes before the market crash. I remember every little weapons test, Israel/Hamas Israel/Hezbullah crisis, and Iranian saber rattling would result in price spikes --- but I don't see the same phenomenon (to the same degree anyway) with the new production from other places - so my theory is stable prices for a while, like 10 years, until the Chinese and Indian factories crank out tens of thousands of more vehicles for the roads. However, I really believe there will eventually be a nuclear war in the middle east (5-10 years away) - and countries with ICE dependent economies will be in turmoil until the dust settles.

danm

ejj,
for the sake of stability i hope you're right. But for i'm doubtful. Iraq may very well disintegrate into anarchy. I certainly hope not, but it's possible. And i don't think the Petrobas find will come into production for 3-4 yrs.
-
For the sake of change, i hope you're wrong and oil prices spike. this would hurt for a while but would kick start the change toward EV's, etc.

danm

And let us pray there is no such thing as nuclear war in the middle east. That would be a disaster for all humanity.

SJC

It would be nice to be in a position on oil usage where we are not affected as much no matter what happens in the middle east.

If the U.S. took the lead on cellulose E85 plug in hybrids, we could be rid of middle eastern oil and then what we do depends more on foreign policy and less on economic and energy concerns.

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