General Motors (NYSE: GM) halted construction of a $370 million plant in Flint, Michigan, that was expected to build engines for the Chevy Volt electric vehicle, according to a Reuters report.
As a result the automaker, which has been struggling to stay afloat, will have to import engines for the initial run of vehicles slated for 2010.
The company said it expects the delay of the plant to be temporary, while it finishes an assessment of manufacturing capacity. The plant was to make two different engines: one to recharge the Volt’s batteries for extended range driving, and another for a new small car, the Chevy Cruze.
A United Auto Workers official told Reuters that GM assured the union production of engines for the Volt would be transferred to Flint as soon as possible.
GM may chose to build the Chevy Cruze engines in South Korea, where a subsidiary is already building a version of the vehicle.
Earlier this month, GM said it was investing $30 million in a Michigan plant to assemble 400-pound battery packs for the Volt. Lithium-ion cells for those battery packs are to be supplied by Korea’s LG Chem (051910.KS)
GM intends to build roughly 10,000 Volts in 2010, eventually increasing to about 60,000 units a year; however the company has said it doesn’t expect the company to be a money-maker in the near term.
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It takes a company like GM to ensure their first entry into the electric car market is a heavy porker sports car like the Volt.
This is the same company that put hybrid technology into their SUV’s first. Check out the Escalade, a 6,000 pound porker that gets 24 mpg if you select the hybrid option. These guys never learn, yet we hand them bailout money. Congratulations to Ford who has enough sense to say “no” to bailout money – perhaps they’ll be the first U. S. company to come up with a small, light hybrid or electric vehicle to compete with Toyota and Honda.