Detroit-based GM is halting work on a $370 million plant in Flint, Mich., that was to manufacture the backup engine for its Volt plug-in hybrid car due to hit showrooms in 2010, as well as fuel-efficient engines for the forthcoming 40 MPG Chevy Cruze, which will use a conventional engine. The work was halted, according to company officials, as part of GM's broader effort to cut spending and preserve cash. GM has warned that absent assistance it could be forced into Chapter 11 protection by January.
GM officially remains committed to bringing out the Volt as scheduled. Still, the message to Congress, and in particular lawmakers sympathetic to environmentalist complaints that the automakers have not done enough to refocus their businesses to deserve a bailout, appears clear: A restructuring GM, on its own, can not afford the R&D costs of bringing new technologies like the Volt to market.
The move could also impact the United Auto Workers, who lauded the factory as a destination for about 300 union workers who would otherwise have been out of a job.
GM says the shutdown is temporary, but local Flint officials say the plant could be scrapped in favor of simply adding an engine line to an existing engine plant in the city. -
Lou WhitemanSee story in Flint JournalSee DealWatch: Autos
General Motors Corp. on Wednesday delivered a message to lawmakers on the fence about a potential bailout package, disclosing it has suspended work at an engine plant that is seen as a key to the company's plans to reinvent itself as a green automaker.
