GM awards small-car production to Michigan plant

General Motors will make its new subcompact car in Orion Township, Mich., the automaker said Friday, dashing hopes in Spring Hill, Tenn., and Janesville, Wis., that the small car would keep one of their factories alive.

Stamping for the new car will take place in Pontiac, Mich., GM said in a statement. The small car, which GM said it plans to start producing in 2011, will save about 1,200 jobs in Orion and 200 in Pontiac.

GM originally planned to make the new car in China, basing it on the Chevrolet Spark set for sale next year in Europe. But in May, GM agreed to make the car in the United States in exchange for UAW concessions in advance of the automaker's June 1 Chapter 11 bankruptcy filing in New York.

The automaker said it planned to retool the Orion factory to make as many as 160,000 small and compact vehicles a year on two shifts. The Spring Hill and Janesville plants, which had been candidates for the small car, now face the prospect of indefinite idling.

The Orion Township plant currently makes the Chevy Malibu and the Pontiac G6 sedans and was scheduled for standby idling in September.

GM is phasing out its Pontiac brand by the end of 2010, and the automaker also builds the Malibu in Kansas, City, Kan. The entire Pontiac stamping plant was set to idle by December 2010.

GM will still idle both plants as scheduled and expects to begin retooling them in late 2010, the automaker said. It will only reopen building No. 14 of the Pontiac plant and will keep buildings 15 and 25 closed. The Spring Hill assembly plant, which makes the Chevrolet Traverse crossover, is scheduled for standby in November. It could power up again if GM needs additional capacity due to future market demand, the automaker said. Production of light-vehicles ended in December at the Janesville factory, which was the oldest car plant in North America. The plant's medium-duty truck line closed this spring.

GM's plant location for the car became politicized because the U.S. government is slated to own 60 percent of GM once the company emerges from bankruptcy protection.

Last week, the Michigan congressional delegation launched an all-out lobbying effort to land the plant.

"It is in the best interest of the company to build upon its 100 years of shared history with Michigan," said a letter from Democratic Sens. Carl Levin and Debbie Stabenow, as well as 15 U.S. representatives.

By Chrissie Thompson- Automotive News