GM To Build Volt Engine At Existing Flint Plant
Date: 25-Feb-09
Country: US
Author: Soyoung Kim, David Bailey and Poornima Gupta
DETROIT - General Motors Corp (GM.N) said on Tuesday it would use an existing Michigan plant to build engines for its key all-electric Chevy Volt and its new Cruze small car, slashing capital investment costs by $120 million.
GM, which last week raised its request for U.S. government aid to support a turnaround, said it would invest about $250 million at an existing plant in Flint, Michigan, rather than continue construction of a new facility there at $370 million.
"This means that GM will not invest in new floor space at this time due to current capital expenditure constraints and available floor space in existing facilities," GM said in a statement.
GM has received $13.4 billion of loans from the U.S. Treasury and has sought up to $30 billion overall.
The automaker expects to begin preparing its Flint South engine plant in the spring for installation of new machinery and equipment. Production of the four-cylinder engines is targeted to begin in December 2010.
GM plans to begin Chevy Volt production in November 2010 and engines will be supplied from GM's European operations until the Flint plant is ready, spokeswoman Sharon Basel said.
GM suspended work on the new Flint engine plant last year, underscoring the pressure the automaker is under to cut costs. It canceled some construction contracts on the new plant in January and said it was considering nearby options.
The Volt is designed to run 40 miles on battery power alone, with the small engine designed to kick in after its electric-only range is exhausted as a generator to send power back to the battery to keep it running.
GM plans to build about 10,000 Volts in the first year of production, eventually building up to about 60,000 per year.
The automaker plans to use the electric-drive architecture that underpins the Volt for other models. It showed a Cadillac concept car along those lines at the Detroit auto show in January.
(Editing by Gerald E.McCormick)