Bloomberg News

GM to Spend $449 Million on Plug-in Hybrid Production Capability

April 08, 2014

General Motors Co. (GM:US) plans to invest $449 million at two Michigan factories to aid production of its plug-in hybrid Chevrolet Volt, two other models and the batteries that help power them.

GM will invest $384 million at its Detroit-Hamtramck assembly plant that makes the plug-in hybrid Volt and Cadillac ELR among other models, Gerald Johnson, GM’s vice president of North America manufacturing, told reporters today in Detroit. The company employs 1,436 hourly and 183 salaried workers there and 100 people at its Brownstown Township, Michigan, battery factory, where he said it will spend $65 million.

“General Motors is committed to building award-winning products and developing technologies in America, which helps to grow our economy from a resurgent auto industry,” Johnson said in a statement. “These investments will help the next-generation Chevrolet Volt build on its position as the leader in electrified propulsion.”

The investments will be made over the next two years, Johnson said, adding that GM has no plans to add a second shift at the Volt factory. He declined to elaborate on the two future vehicles.

Volt is pivotal to GM’s efforts to have about 500,000 vehicles on the road by 2017 with some form of electrification. It has not been the hit GM expected. Through March, GM had sold 3,606 Volts in the U.S. in 2014, 15 percent fewer than the same period last year, according to Autodata Corp. Dan Akerson, GM’s former chief executive officer, had forecast Volt sales of 60,000 in 2012, before settling for half that number. Last year, GM sold 23,094.

Price Cut

The Volt starts at $34,185 after GM cut the price in August to compete against the better-selling and less-expensive Toyota Prius and Nissan Leaf.

GM said last year it will improve the electric-only range of the car by at least 20 percent in the next version of the Volt. The Volt, introduced in 2010, can travel an estimated 38 miles (61 kilometers) on battery power before a gasoline engine engages.

The automaker’s Detroit-Hamtramck plant also handles production of the Chevrolet Malibu and Impala. The 3.6 million-square-foot facility, opened in 1985, operates one shift, five days a week.

GM makes lithium-ion battery packs for its hybrids at the Brownstown Township plant, south of Detroit. The facility, part of a subsidiary called GM Subsystems Manufacturing LLC, opened in mid-2009.

Sales of the all-electric Leaf totaled 5,184 in the U.S. this year through March, a 46 percent increase from 2013, according to Autodata. Toyota sold 43,648 of its Prius hybrids in the U.S. through March, a 22 percent decline from a year earlier.

GM has sold 180 ELRs, which starts at $75,000, this year through March. All prices exclude as much as $7,500 in federal tax credits.

To contact the reporter on this story: Mark Clothier in Detroit at mclothier@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net Niamh Ring, John Lear


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