GM Chooses Michigan Plant for New Small Car

26th June 2009

GM announced today that it will utilize its Orion Township, MI plant to produce its new small car. Orion had been considered along with the Janesville, WI and Spring Hill, TN plants for the project. Along with the Orion Plant, GM’s Pontiac stamping plant will be saved to provide stamped metal parts for the new small car.

GM projects this decision will restore approximately 1,400 jobs in total — 1,200 at Orion Assembly and 200 at Pontiac Metal Center, Building # 14 – in Michigan, which presently has the highest unemployment rate in the country. As announced on June 1, 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.

Chevy Spark

GM keeps using the term “small car” to describe the vehicle that will go into production in Orion, but what is it really? The scuttlebutt is that it is the next-generation Chevrolet Aveo. It is designed and engineered in Korea by GM Daewoo, along with the upcoming Chevrolet Spark. The current Aveo is imported from Korea as will the Spark, and it looks like the new Aveo will be made in Orion Twp, MI.

The very idea that GM would have chosen to make a small car in the US would have seemed laughable recently. However, GM’s new ownership structure virtually guaranteed that they would do something like this. They say that they will be able to produce the car here profitably, but you have to wonder what changed so drastically to allow this. Is it the new UAW contract? Is it tax abatements, which are still to be worked out? Or is it clever accounting, meant to look like a good decision, when it is not? As a shareholder, we should all be concerned whether this is a sound business decision or a move to suck up to the new owners (taxpayers and the UAW). As a resident of Michigan, I am happy that the work is coming here, we can certainly use the jobs - and it’s a pretty cool looking car.