GM Delays New Plant

US automaker GM announced it would stop development of its new assembly plant in Flint Michigan which was going to be utilized to build their 1.4L Cruze engines and their electric car the Chevy Volt.

The news didn’t come as a surprise as the auto giant has been struggling to stay afloat and cutting costs wherever possible in order to remain operational. This move was just another notch on the belt, how much tighter it could get remains to be seen.

In the worst crisis ever, General Motors has been trying its best to maintain operations long enough to receive the government bailout of US$4 billion that it had requested. Cash flow is their immediate concern and they expect situations to get worse into the start of 2009 when it comes time to pay their suppliers.

General Motors however has stated that while plans for the new plant has been delayed the 2 models won’t be. The 1.4L engines for the Chevy Cruze will still begin manufacturing at another one of its plant in the US. This news comes in as great relief to many auto makers, especially Holden Australia who are expecting the new line of GM’s smaller CC engines to power their next-gen sedans.

As for GM’s electric car, the Chevy Volt, no information has been provided about where exactly it will be built but GM had stated that it would begin production late 2010 too.

So at the moment it seems the only ones that will suffer from the delay are the 330 employees looking to secure jobs at the proposed Flint Michigan plant. And what was going to be the hourly wage set at the new plant? A meager US$14 per hour, half of what was originally being paid. In a city hit worst by the auto industrial crisis, there seems to be lesser hope for a better tomorrow.