By on December 17, 2008

The new Flint, Michigan engine plant slated to build the ICE for the Chevrolet Volt has been put into deep freeze. AP (via Yahoo) has this latest tale of woe. Word is that GM has shut down construction because it doesn’t have the cash to pay for steel structural members. The Volt’s 1.4 liter four banger is to be shared with the Chevy Cruze, and both engines are planned for the brand new factory. Why is GM constructing a new building to manufacture this engine while at the same time closing factories by the dozen? Ah, the answer is hidden in Spokeswoman Sharon Basel’s statement: “The company already makes the 1.4-liter engine at a plant in Austria, she said, giving it another option for engines.” The last thing cash strapped GM needs is another engine factory while global automotive demand is imploding. If the Volt ever appears, look for its exhaust note to have a distinctly Austrian accent. California’s Governor Schwarzenegger will be so proud! Only four short months ago GM said it would spend $370 million building the new engine plant, and scored $132.5 million in Michigan tax incentives for its efforts. Hopefully Michigan didn’t put cash on the barrel. Bailout or no, the prospects for this factory going online are only slightly better than those for the revival of the GM Rotary Engine, likewise “put on hold” decades ago.

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29 Comments on “Volt Birth Watch 120: Engine Plant Construction Halted...”


  • avatar
    Diewaldo

    I am working for a supplier and the information that I got is that GM is currently building no cars in North America until the end of January.

    One comes to wonder if they will be building any more cars past this date, due to their current cash problems. And I agree: They have more than enough factories.

  • avatar
    Stu Sidoti

    RW: ” Hello JennyG….this is Rick….yeah that one, Rick Wagoner….about that $132Million, can you come up with a little more? If not, we’ll be forced to spend, ooops I meant invest that money somewhere else, know what I mean?”

    It’s like this…if they build it here they’ll proclaim it’s ‘All-Americaness’…if they build the ICE somewhere else they’ll proclaim that they are ‘ Drawing upon the expertise of the finest in GM Engineering around the World…I meant ‘Planet’ Sorry Sierra Club-it’s Planet.

    That is of course if they ‘Get‘ to build it…there’s a whole lot of ‘IFs’ coming out of the White House lately.

  • avatar
    bill h.

    Point taken. So here’s my ignoramus question: We know that one of Detroit’s problems is that their older assembly plants do not have the “flexibility” to switch product lines like the newer ones from the transplant companies. Does this apply to engines as well? Can an engine plant have some comparable amount of “flexibility” across product lines? Sure, I realize that it’s likely to be difficult/impossible to switch on a dime all the casting/forging etc. operations between a turbo-OVC 4 and a pushrod V-8. But how about more similar engine lines, such as the Duratec or Ecotec variants, or among some of the V-6 engines? Could not one of the Ecotec plants instead do the Cruze/Volt engines as well?

  • avatar
    Stu Sidoti

    Quote Diewaldo: ” I am working for a supplier and the information that I got is that GM is currently building no cars in North America until the end of January.”

    Not building cars? So the car carriers I see running around are hauling decoys? I see-BRILLIANT Master Plan Rick-make people THINK that you are selling cars by DX-ing them between dealers on car carriers-GENIUS!!!

    As for Trucks…believe me they’re building Trucks and SUVS. Sales may be slow here in the U.S.of A. but in Central America and the Middle East SUV sales are causing Arlington and Silao to work OT…

  • avatar
    ca36gtp

    “Well, I’ve already shot myself in this foot, now the other one just looks left out…*BANG*”

  • avatar
    Redbarchetta

    Here is a question.

    If the Cruze and Volt ever see the light of day and I don’t think they will, won’t the fact the engine is being made in Europe effect the price point. The idea was to have cost savings by building the engine here not in high cost bad exchange rate europe. Plus doesn’t the engine they make there go in their european Opels and Fiats will that meet US EPA regs?

    So they lied about not being able to make the Cruze now because the engine wasn’t ready. Never trust GM, lieing bastards.

  • avatar
    PeteMoran

    Didn’t they have an existing engine they could have modified to get the Volt out the door? At least when initial volumes are likely to be so low?

    (Slaps forehead) Oh, I see they did, sitting in Austria!

    Product Planning failure count ##? (I haven’t been here long enough to know what the count is up to, but it must be HUGE).

  • avatar
    porschespeed

    But duuude, what about the Camaro?

  • avatar
    PeteMoran

    @ porschespeed

    Whoa, the Camaro was to run 1.4L 4-banger?!?

  • avatar
    KeithBates

    @ Redbarchetta

    If you already own a building, and the tooling, and have a qualified staff
    to assemble it, you would probably save money importing the engines,
    rather than building another manufacturing plant, more tooling, training
    the chimps to screw them together here in the US…

    SteveL

  • avatar
    TexN

    Methinks the structural steel supplier demanded cash up front so now…….no building! See, GM, things get tougher when you run your freaking business into the ground and treat suppliers like crap in the process! Reap/sow, made your bed/lie in it, etc. So many cliches, so little time! (oops! there’s another one!)

  • avatar

    Surely with all the empty auto factories around, GM and otherwise, they could have converted one? But of course that isn’t as much of a media event as opening a NEW building. Unbelievable.

    John

  • avatar
    SunnyvaleCA

    Using a rotary in the Volt might not be such a bad idea. It would be small, light, and fairly inexpensive. Since it would rarely be used, emissions and fuel economy would be less of a problem. The only real glitch would be that of “image”–a not-so-green rotary engine inside what is supposed to be the greenest of machines.

  • avatar
    porschespeed

    Pete,

    No, though with GM all things are possible – except their survival as is.

    Sorry I’m sometimes a bit nuanced, and sometimes downright obtuse.

    I was going far out into left field – an open question. If GM is shutting down building an engine plant which, theoretically, should be for a volume-ish car, what chance does the Camaro have of ever hitting showroom floors?

    (I have seriously doubted for over a year that the Camaro would ever roll. I doubt it more every day.)

  • avatar

    HEY! Derek Flint was super cool. -Don’t bring him into this.

  • avatar
    Bubba Gump

    Camaro is not slated to use any type of 4 cylinder. It gets a 3.6DI engine as a base motor and a 6.0 or 6.2 V8 in the SS Model. Production intent final validation Camaro’s were shipped from the plant this week to gm engineering.

    While GM stated the I4 built at the austrian plant could be used it cannot be used in its current format. It would need to be revised (the engine and the plant) and one variant of the new I4 is not built there so the cruze line up would have a hole in it until the flint plant is finished. That plant will get finished because that engine is going in more new models than just Volt and Cruze.

    Redbarchetta
    I don’t ever remember GM in an official capacity say or put into print anywhere that the reason the Cruze was slated to launch here in 010 or 011 was because the engine was not ready. I have read postings indicating this but I don’t believe any GM official has ever said it. Its pretty hard to lie about something that was never said. Jus sayin.

  • avatar
    John Horner

    “While GM stated the I4 built at the austrian plant could be used it cannot be used in its current format. It would need to be revised (the engine and the plant) and one variant of the new I4 is not built there so the cruze line up would have a hole in it until the flint plant is finished.”

    This is the kind of mistake you don’t see Toyota, Honda or Nissan making. They don’t proliferate umpteen incompatible versions of roughly similar engines and they don’t dedicate engine plants to a narrow range of production possibilities. They also rarely bulldoze one factory just to turn around and build a complete new one next door. In August of this year GM shut down Flint North, birthplace of millions of 3.8 l V-6 engines. Why the bleep didn’t GM re-tool Flint North for the new production instead of starting from scratch? Then they wouldn’t have been laying out cash for new structural steel.

    Back in the late 80s I remember reading an article about some US auto executives visiting Toyota’s big engine factory in Japan. They expected to see that latest and greatest of everything, but were shocked to find 1950s vintage equipment still in use. The degree of automation was also much less than they expected.

    Toyota’s equipment had been adapted, modified, improved and tweaked in ways GM never thought of, but under it all the old stuff was still there doing its thing. Toyota’s attitude is to avoid waste whenever possible. Just because the accountants say a building or machine is depreciated and therefore “worthless” doesn’t mean it is.

  • avatar
    PeteMoran

    @ John Horner

    It’s even more stupid than that.

    Toyota had a worldwide project to reduce the number of overhead roof assistance handles, the ones you use to get out of the car, from more than 8 to just 3 (or 4 can’t remember). Chrysler use 8.

    Toyota use 4 starter motors, GM use 12.

    Toyota use 3 types of indicator stork, Ford use 7.

    On and on and on it goes…..

    (I apologise if these numbers are a bit different now, this might have been a year or two ago, but you get the idea).

  • avatar
    Redbarchetta

    KeithBates if that is the case then why didn’t they import the engine all along, especially if they have this extra capacity there to supply all the engines for both the Volt and Cruze. The margin is going to be small on both those cars if they made any profit I don’t see how importing the engine is going to make it cheaper.

    TexN When the prices of steel were through the roof and going up on a weekly basis it was cash upfront for all orders or the next person in line got your steel. I’m sure with the building slow down and steel price stabalization that’s not the case now, but you never know a smart steel subcontractor woudl ask for a hefty deposit knowing GM’s situation. Also GM can’t stiff the GC or subs on a construction project like they do their normal suppliers. If someone doesn’t get paid they are going to put a lein on the property and start something very messy.

    This whole stopping construction because of steel costs looks fishy to me. Maybe GM is so big they don’t need one but most situations would have a short term construction loan even if they were sitting on the cash to build it. The contractor would be putting monthly draws from the bank to get paid for what has been built or materials delivered. They are killing the project mid month because they want to save some cash, I think GM is down to their last 10 days.

    Does anyone drive by this building that can shoot some pictures of the site, I would like to see how far along they are.

    Have they sold their jets yet or were they just leased? If not I expect to be hearing in the next week they found some lucky buyers for all but one of them. Considering it can take months to unload a jet like that they are going to take some major losses on them ust to get $100million in cash at best.

    We need one of those cash clocks that show how much they have left until they cross the line of insolvency, I am guessing they are within $500 million of it.

  • avatar
    Redbarchetta

    Bubba Gump thanks for giving me confirmation that they couldn’t just get by with the Austrian engines and need the plant capacity from the new building, I figured that was the case. And about them lieing I was just going by what I read here or maybe it was on another website. It’s not a lie if they really can’t use the engines in Austria or Korea because they aren’t US compliant and they really do need the ones coming out of Flint. I’ll see if I can find where I read that.

    I don’t understand why they would have so many variations of the same engine, for a company that says they are saving money they havn’t done it in some of the easiest most obvious ways. For a global company they are still run like a bunch of little regional ones where everyone does their own thing. Hard to break those feifdoms I guess, GM sooo needs bankruptcy.

  • avatar
    npbheights

    Is it me or does a 1.4 liter four cylinder engine seem like overkill just to run a generator that is supposed to kick on after 40 miles of driving. Seems like something a one or two cylinder engine could handle, but then I am not a GM engineer, the people who brought you the 500 cubic inch engine and pioneered high performance transverse mounted V8 front wheel drive vehicles….

  • avatar
    PeteMoran

    @ Redbarchetta

    I would doubt selling those corporate jets would actually help GM’s immediate cash position. I can’t imagine for a minute they bought them outright, so they’re probably leased.

    So as well as booking a big loss on the disposal, and/or having to pay-out hard cash to settle the lease, all they’re “saving” is the monthly lease cost plus the poor crew’s salaries (~50 or something) that operated the fleet.

    If they bought them “cash”, then selling them might return some $$$, but who’s gonna buy them in this climate.

    Jet-gate was always a complete distraction.

  • avatar
    DWPittelli

    npbheights “does a 1.4 liter four cylinder engine seem like overkill just to run a generator… Seems like something a one or two cylinder engine could handle”

    You are right that a smaller engine would be sufficient. Hybrids in general are much sportier than they have to be — often faster-accelerating than their conventional siblings, and certainly much faster than almost any non-sports car sold 30 years ago. That said, I think 4-cylinder engines are preferred for smooth operation and reliability. I once rented a Seat in Guadeloupe, and although it had only an 800 cc engine, it had 4 cylinders (fairly peppy, well-handling and comfortable for the front seat, considering its size and economy).

  • avatar
    PeteMoran

    @ npbheights

    A 500cu front-wheel drive V8! What the hell was that? How many people broke their wrists from the torque-steer and how many front ends were wiped out with the under-steer?

  • avatar
    akear

    Well, this is another Lutz-hype vehicle that may fail. Has Lutz had any box offices hits in the US that aren’t the Malibu.

    With all the hype surrounding the Volt if it is not produced GM will have egg all over its face.

  • avatar
    Redbarchetta

    PeteMoran that was my point. If they bought them which I don’t think they did and they are selling them to save some cash it mean their cash situation has reached critical proportions. The same with trying to safe some money on construction costs by delaying the steel delivery and in turn the entire project. At best this is a $100million savings at the expense of having a product they really need to get out of this hole. Either they are bluffing to force the goverment to act quicker or they really are beyond help and cutting off their nose to spite their face. $100million is a lot of money to you and me but not in GM’s finances, especially since they need the building the money is going to be spend sometime, sooner would be better. You have to spend money to make money.

  • avatar
    don1967

    The Volt is the FIRST thing GM should kill… it would be their first proactive decision in years.

    Building another goofy golf cart for the Global Warming crowd does NOT represent the future. It represents the social trends of 2007, when life was good and we needed a cause. But now it is late 2008, the oil bubble has burst, the economy is collapsing, and it is literally snowing in Vegas.

    This is GM’s last chance to plan for the future. The real future.

  • avatar
    Juniper

    KeithBates
    training
    the chimps to screw them together here in the US…

    Thanks for the insult. What do you do for a living?

    I have spent some time training PEOPLE to build engines(non automotive). I have a great deal of respect for them and their abilities.

  • avatar
    KeithBates

    Believe it or not, I assemble engines…

    SteveL


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