GM to invest $240 million in Warren
General Motors Co. will invest $240 million into its Warren Transmission Plant to build the electric drive unit for the next-generation plug-in hybrid Chevrolet Volt, creating or retaining 160 jobs.
GM CEO Mary Barra will make the formal announcement Tuesday at the Detroit Economic Club. Additionally, Barra will detail new GM investments totaling $300 million at Michigan facilities that will be announced by the end of the year.
GM is moving the Volt transmission to Warren from Mexico, and the Flint engine plant will build a new 1.5-liter, four-cylinder engine for the 2016 Volt. It will replace a 1.4-liter, four-cylinder engine used today.
The automaker affirms Michigan as the global engineering base for vehicle electrification. Since 2009, GM has invested $1.82 billion in Michigan that’s related to electrification and the Volt.
“This is definitely a Michigan product,” Barra told The Detroit News on Monday.
GM will debut the new Volt in January at the North American International Auto Show. The current and next-generation Volt will continue to be built at GM’s Detroit-Hamtramck Assembly Plant.
The Volt has not met sales expectations set in 2011 by former CEO Dan Akerson, who wanted production to hit 60,000 annually by 2012. Since the plug-in hybrid was launched in late 2010, GM has sold about 69,000. Last year, GM lowered the price by $5,000 to boost sales.
Barra would not give volume targets for the newest Volt, saying she thinks GM has learned its lessons from sharing overly optimistic sales goals.
“I think it’s fair to say we didn’t sell as many as we initially thought, although the customers that we do have are some of the most satisfied customers in industry,” Barra said. “I still think there’s a lot of people who don’t understand the Volt from an extended-range electric vehicle. It’s our job to keep making sure people understand.”
Barra said the new Volt will offer customers more value, and she thinks it will continue to gain acceptance and give GM an opportunity to improve scale and costs.
“When you do an all-new Volt, you have an opportunity to take even more cost out,” she said. “And then, obviously technology improvements allow you to add more from a technology perspective.”
Analysts say the new car will need better electric range and a good price. In addition, buyers need to better understand how it works.
Barra wouldn’t comment on whether the Volt is profitable; she said GM doesn’t comment on profitability of specific car lines. She also declined to say whether the sticker price of the 2015 Volt would be lower, and wouldn’t say if it would be offered in multiple models.
Earlier this month, Mark Reuss, GM’s head of product development, purchasing and supply chain, indicated the new Volt will continue to have a gas-powered backup engine, will travel farther on an electric charge and have an updated interior. He also noted improvements in battery capacity and chemistry.
Pamela Fletcher, executive chief engineer for GM’s electrified vehicles, speaking this month at the Citi/Society of Automotive Analysts Auto Technology Summit in Southfield, said Chevy has taken a lot of input from current Volt customers to improve the next-generation vehicle.
“I think in the next car you’re going to see everything they love made better — and the things they tell us they’d like us to do differently, we’ve worked on those as well,” Fletcher said.
Volt has hit a watermark of about 2,000 sales a month, said Mike Albano, head of communications for Chevrolet. “We’re not ashamed of that at all,” he said. “That’s 24,000 a year and there’s a lot of brands that don’t do that with their cars.”
GM said about 70 percent of the new Volt’s parts will be made in the U.S. or Canada within the first year of production, up from about 50 percent today. GM believes that’s the highest percentage for a plug-in or hybrid.
The automaker in Flint builds the range-extending engine that powers the Volt once the electric battery is depleted, while battery packs are assembled at its Brownstown Battery Assembly Plant. The battery cells for the Volt are produced at LG Chem in Holland. Electric motors for the Volt also are made in the U.S., GM said.