In yet another blow to both General Motors and the hard-hit city of Flint MI, it appears that the automaker has canceled construction contracts on its new Flint MI engine plant. Local TV station WJRT-12 reported the news late last night and we're still waiting on a comment from GM. The plant was scheduled to produce a new 1.4L four cylinder engine to be used in the Chevrolet Cruze and Volt beginning int 2010. Work on the factory had already been suspended in mid-December in an effort to cut spending.
The plant was announced last September just before the financial crisis hit in full force and even sales of small cars collapsed. GM spokeswoman Sharon Basel told the TV station that other facilities are being considered for production of the engines. An existing version of the 1.4L "Family 0" engine is already being produced overseas and if world-wide auto sales continue to lag over the next 18-24 months, those factories would likely have sufficient capacity to supply engines for both the Cruze and Volt in 2010. We'll update this story as we learn more. Thanks to Donny for the tip!
Update: We just spoke with Sharon Basel at GM. Basel told ABG that the Flint plant was never planned to be ready for Job 1 of the Cruze in spring 2010 and Volt later in the year. It was always planned for initial engine supplies to be provided from European engine plant that builds the Family 0 engines. That plan continues and the events in Flint will not affect program timing for either Cruze or Volt. The intention is still to add Family 0 production in Flint with timing being dependent on economic conditions. The contract cancellations came at a time when GM would have had to commit to spending more capital that it doesn't have right now. This allowed GM to avoid paying out more money for the plant that it was not ready to proceed with yet.