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Winnipeg Free Press - PRINT EDITION

GM selects plant for next car generation of cars

1,200 assembly jobs safe in Orion Township Orion Township

By: Greg Gardner

29/06/2009 1:00 AM | Comments: 0

DETROIT -- The proximity of suppliers, a nearby stamping plant and tax abatements and incentives unmatched by Tennessee and Wisconsin enabled General Motors Corp. to select its Orion Township, Mich., assembly plant to produce the next generation of its compact and subcompact cars.

In addition to saving 1,200 jobs at the assembly plant, where GM will invest between $600 million and $800 million, the automaker will reconfigure its Pontiac, Mich., stamping plant where another 200 people will be needed to produce the body panels, and other metal components for two unnamed models that will be produced beginning in 2011.

But GM is defying conventional auto industry wisdom that very small cars can be produced profitably with American workers. It will be able to hire a significant number of new workers at a more competitive wage and benefit level of about $28 an hour, or about half what it has paid UAW workers in the recent past.

The initial car will be a B-size subcompact, or a car the size of the Chevrolet Aveo, now produced in Korea. Eventually, the plant will be able to assemble a car the size of the Chevrolet Cobalt or Pontiac G5.

At full production, the plant will be able to produce 160,000 cars annually.

GM's North American President Troy Clarke said Wisconsin, Tennessee and Michigan all made attractive offers, but Michigan's was a "very, very, very good offer." He didn't provide specifics, but local officials said Orion Township offered a 25-year, 100 percent personal property tax abatements, potentially worth $100 million over 25 years.

"Their major advantage was the Pontiac stamping plant," said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich. "They had looked at Janesville a number of times, but it's so close to a river that there was no way they could put a stamping plant within five miles of the assembly plant."

-- McClatchy-Tribune Information Services

Republished from the Winnipeg Free Press print edition June 29, 2009 B6

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