GM to invest $449 million in plants for next-generation Volt, 2 future products

Gerald Johnson, GM's North American manufacturing vice president, details the automaker's $2.8 billion investment in Michigan plants since 2009.

Photo credit: Steve Fecht
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DETROIT -- General Motors plans to invest $449 million at its Detroit-Hamtramck Assembly Plant and a battery assembly facility in suburban Detroit to build the next generation Chevrolet Volt and two future vehicles that weren’t disclosed.

The plans include $384 million at Detroit-Hamtramck for new body shop tooling, equipment, and additional plant upgrades, GM said in a statement.

The other $65 million is earmarked for the Brownstown Battery Assembly plant south of Detroit and will help develop the next generation of lithium-ion battery production and future battery systems, the statement said.

“These investments will help the next-generation Chevrolet Volt build on its position as the leader in electrified propulsion,” Gerald Johnson, GM’s North American manufacturing vice president, said in the statement.

Johnson would not say if the investments would create new jobs or merely preserve existing jobs at the operations.

"We will allow the market to tell us what the need will be," Johnson told reporters at an Automotive Press Association event.

The Detroit-Hamtramck plant employs about 1,600 workers on a single shift. It is currently the only facility assembling the plug-in hybrid. The plant also produces the Cadillac ELR, the Chevy Impala and Malibu, and the Volt's European sister, the Opel Ampera.

Johnson said the $384 million is the largest single investment GM has made in the plant, which opened in 1985. It took $300 million to launch the operation, he said.

GM has invested more than $1 billion at the site in the last five years.

“It’s one complex assembly facility, and the people there are proud and dedicated to make it all work together,” Johnson said.

The battery assembly plant is about 30 miles south of the Detroit-Hamtramck factory, in Brownstown Township, Mich. The plant makes the batteries for the Volt, Ampera and ELR, a GM spokesman said.

Johnson said the plant is the first U.S. high-volume manufacturing site of automotive lithium-ion battery technologies.

GM has announced more than $5.4 billion in U.S. facility investments since 2009, with $2.8 billion going to Michigan operations.

“Detroit, Michigan is still the epicenter of the auto industry,” said Michigan Gov. Rick Snyder, who added that 2.2 million vehicles were built in his state during 2013.

GM is prepping for the next-gen model as sales of the current Volt slow. During the first quarter, GM sold 3,606 units in the United States -- down 15 percent from the year-earlier period. Sales in 2013 fell 2 percent to 23,094 vehicles.

Opel's new EV

GM's Opel brand, meanwhile, is planning a small-car offensive and a new car with electric drive, according to Automobilwoche, a German affiliate of Automotive News. Opel sales chief  Peter Christian Küspert disclosed the developments at a recent meeting with  German Opel dealers.  “His talk was really electrifying,” a participant said.

Sources told Automobilwoche that Küspert announced a purely electrically driven car code-named “BEV” for 2016-17 that will be significantly smaller and more affordable than the Ampera.

It was not immediately clear if today's announcement was related to the Opel small electric car.

Need to boost range

With many more electrified options hitting the market since the Volt’s debut, analysts say GM will need to boost the Volt’s EPA-estimated 38-mile electric range, while continuing to reduce its price and improving styling to stand out.

Cars.com analyst Jesse Toprak said the future of the Volt is bright, adding that pricing is reaching a point where the middle-class can afford it. The current model is $27,495, including shipping, with a $7,500 federal tax credit.

“There’s still a fair amount of people who don’t fully understand the technology behind the vehicle, so there’s still some education to be done with consumers,” Stephanie Brinley, an IHS analyst, said in an interview Monday.

Toprak said GM should consider giving the next Volt a more futuristic look along the lines of the ELR.

“They’re going to want to go after anyone who’s looking for a small vehicle living in a big city because that’s how you get to that Prius inflection number where you can stop being a novelty car, an early adopter car and transition into being a mass-volume car,” Toprak said in an interview Monday. “There’s no denying that the core market is still the more savvy, younger customers living in big cities.”


You can reach Vince Bond Jr. at vbond@crain.com. -- Follow Vince on Twitter


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