General Motors (NYSE: GM) on Tuesday said it is scrapping plans to build a new factory to build engines for the Chevrolet Volt. Instead the company plans invest approximately $250 million to produce the 1.4-liter 4-cylinder engines in an existing plant in Flint, Michigan.
The struggling automaker previously announced that construction of a new $370 million plant was merely delayed.
The company said the decision will save $120 million, while creating the same number of jobs, approximately 300.
"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.
Preparations to the Flint South plant for installation of new machinery and equipment will begin this Spring, the company said. Production is targeted to begin in December 2010.
A report on the website GM-volt.com said the engines for the first Volts–due out in 2010–are likely to come from a factory in Austria.
In January, 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)
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