Gm Delays Work On Volt, Cruze Engine Factory To Save Cash

fbachman · December 17, 2008

DETROIT -- General Motors, saving cash as it awaits federal rescue loans, has suspended construction of a Michigan plant scheduled to build fuel-saving engines.

The delay at the $349 million factory in Flint won't affect the late-2010 launch of the Chevrolet Cruze small car and the Chevy Volt plug-in hybrid, spokeswoman Sharon Basel said today.

CEO Rick Wagoner announced the plant on Sept. 25th and said it would produce two versions of a 1.4-liter four-cylinder engine, one with a turbocharger for the Volt and one without for the Cruze.

The delay reflects GM's heightened efforts to reduce spending as its supplies of cash dwindle. GM is waiting for the White House to approve a bailout that will keep the automaker operating and avoid a Chapter 11 bankruptcy filing.

The postponement will allow GM to halt payments for construction materials, Basel said.

"Steel has been ordered but placed on hold, as have additional orders,'' she said. "This has only to do with the construction of the plant, not the program timing.

She said there is enough leeway in the construction schedule for it to build the engines on time after the temporary hold. She did not say when the work would resume.

She said the Flint factory is being built with a common template used around the world. The plant can be assembled in less than a year, she said.

The 552,000-square-foot facility will be able to build 800 engines a day. Another $21 million is being spent for a vendor tool area.

GM already builds a nonturbocharged version of the engine for its European small cars. Basel said GM has no plans to import those powerplants from Europe if the U.S. project ends up behind schedule.

MS3DALE · December 17, 2008

Hmm........I had no idea GM was building a "new" plant to build those engines,I thought they were going to use an existing plant

BuckFeverZ · December 17, 2008

Same here. You think they could've used one of the plants the closed and kept some of those jobs...

jrrod2004 · December 17, 2008

hmmm, retool vs new plant - just plain dumb with the new plant instead of retooling an existing one

SLESierra · December 18, 2008

Maybe the tool CEO needs retooled - just a passing thought

MS3DALE · December 18, 2008

Maybe the tool CEO needs retooled - just a passing thought

Thats true though,I think 'ol Rick needs to go

redvett · December 18, 2008

If you haven't seen the new plants like the 3.6L V6 or the L6 4.2L built here in Flint you have no idea, the plant is high tech and very economical to build and run. The old plants and we have one where the 3.8L was built is a dinosaur in comparison.

MS3DALE · December 18, 2008

If you haven't seen the new plants like the 3.6L V6 or the L6 4.2L built here in Flint you have no idea, the plant is high tech and very economical to build and run. The old plants and we have one where the 3.8L was built is a dinosaur in comparison.

Yeah,But wouldn't it still be cheaper to "retool" an existing plant than to build a whole new one?

jrrod2004 · December 18, 2008

If you haven't seen the new plants like the 3.6L V6 or the L6 4.2L built here in Flint you have no idea, the plant is high tech and very economical to build and run. The old plants and we have one where the 3.8L was built is a dinosaur in comparison.

Yeah,But wouldn't it still be cheaper to "retool" an existing plant than to build a whole new one?

easy, gut the building and redo it...I learned that in architecture class. The building itself is an asset...no sense in destroying something of benefit

MS3DALE · December 18, 2008

If you haven't seen the new plants like the 3.6L V6 or the L6 4.2L built here in Flint you have no idea, the plant is high tech and very economical to build and run. The old plants and we have one where the 3.8L was built is a dinosaur in comparison.

Yeah,But wouldn't it still be cheaper to "retool" an existing plant than to build a whole new one?

easy, gut the building and redo it...I learned that in architecture class. The building itself is an asset...no sense in destroying something of benefit

Thats what I was thinking

Zembonez · December 18, 2008

It makes sense to cut back or delay intro of low volume "show off" vehicles like the Volt. Even though the greenies get all horny about stuff like it, there isn't a hell of a lot of actual practical uses for it.

How about cutting some slow sellers and concentrating on building less models... but building them better than anybody else. That's what will help GM in the long run. They have already made great strides in quality improvement.

redvett · December 18, 2008

No because the old plants are 60-70 years old and large 2 million sq ft. The new ones are around 600-700000 sq ft and only one floor where the old were two & three floors. No MFR's today make every part like they did 20 years ago they contract suppliers to provide the parts for the product at a lower cost.

If you haven't seen the new plants like the 3.6L V6 or the L6 4.2L built here in Flint you have no idea, the plant is high tech and very economical to build and run. The old plants and we have one where the 3.8L was built is a dinosaur in comparison.

Yeah,But wouldn't it still be cheaper to "retool" an existing plant than to build a whole new one?

Schmids5.3l · December 18, 2008

Same here. You think they could've used one of the plants the closed and kept some of those jobs...

It would be nice if they moved something to the truck plant here in Moraine Ohio, they are closing it on the 23rd I believe...I think they produced Trailblazers and Trailblazer SS's.

fbachman · December 18, 2008

If you haven't seen the new plants like the 3.6L V6 or the L6 4.2L built here in Flint you have no idea, the plant is high tech and very economical to build and run. The old plants and we have one where the 3.8L was built is a dinosaur in comparison.

Yeah,But wouldn't it still be cheaper to "retool" an existing plant than to build a whole new one?

it really depends....That plant may be (or WUZ) going up somewhere where they got a hefty tax abatement, which, may have offset any savings by re-tooling a two-decade old plant.... there are so many variables.

A lot of time these plants have equipment that gets anchored into place in concrete and it's cost-prohibitive to tear it out and start over.

If ya liove in a ranch, and want a two story, I GUESS you could add the second floor, but.... may be easier to just cough it up and build a new one, and sell the old.

If it was an old plant, may not have the computer/electrical infrastructure in place for newer digital equipment/tools. I mean, there are MANY variables....