www.mybaycity.com
August 30, 2009
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$52 Million Investment Boosts Future for GM Bay City Powertrain Plant
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Sketches have been released of a new subcompact or B-class GM car called the Chevy Agile in South America where it will be released in the fourth quarter of 2009.
General Motors' strategy of focusing on four vehicle brands and fuel efficient vehicles appears to be placing a new foundation under the Bay area economy.
GM quietly added $15 million in belt grinding equipment in Bay City Powertrain last year even as bankruptcy was looming.
Now, another $37 million is being pumped into the local plant to develop parts for the battery-powered Chevy Volt.
The link to the new GM and transition to the alternative energy economy is raising local and state economic expectations to unforeseen heights.
A related area development is a $600 million Midland Dow-Kokam battery plant, with planned opening in 2011 and projected employment of 885.
The Bay Area Chamber of Commerce, led by President Mike Seward, and the Bay Future public-private economic development agency have been instrumental in arranging meetings of city officials and local business leaders with GM brass over the past several years in efforts to secure the future of the local plant.
GM production increases of 35 percent in the third quarter of 2009 and fourth quarter projections of an additional 20 percent are positive for the Bay City plant and others in Michigan.
All this is good news for the 335 employees of the local plant and for a community that has had a GM economic base for 91 years.
City fathers, like new dads, were ecstatically handing out cigars last week after attending the GM press conference at the local plant.
Mayor Charles Brunner commenting that a 100 percent 50 year personal property tax exemption by the city and "the hard work and dedication of the labor union and management were the real reasons that General Motors made this commitment to the Bay City Powertrain."
City Manager Robert V. Belleman noted the mayor's automotive-related trips to Washington, D.C., and the City Commission's support were keys to the local investment.
The manager saw wider and more positive implications for the state: "This investment of the General Motors Powertrain plant is one building block in turning Michigan around through our commitment to alternative energy and alternative fuel vehicles."
GM filed for bankruptcy June 1, 2009 and launched the New GM on July 10. The U.S. government took an 11.8 percent stake in the firm with a $19.4 billion investment.
GM expects to take the new firm public by next July and regain profitability in 2011. The firm is promoting its revival on a new website, gmreinvention.com.
GM reportedly expects to develop 25 new car models in the next few years, many of them small "flex-fuel" battery-powered or hybrid types. These include the Chevy Viva, being introduced in the fourth quarter of 2009 in South America as the Chevy Agile.
Automotive pundits immediately responded, one Washington report stating that the firm "apparently is going to make cars the public actually wants to buy."
GM President Fritz Henderson seems to be presiding over the almost miraculous recovery of the firm from the depths of despair with a new lean ties-off management approach.
Top GM executives appeared at a technology promotional event last month without the traditional neckties and Henderson has scrapped several cumbersome committees and focused two weekly meetings on quick decision-making.
GM also operates Powertrain plants in Saginaw, two in Flint, Livonia, Romulus, Warren, Ypsilanti and Wixom, Michigan.
The production hikes added 60,000 cars and trucks to projected GM totals for next year, restored shifts to Ohio and Ontario plants and reinstated 1,350 jobs, the firm stated.
Henderson expanded the 230 mile per gallon prospect for the Volt, by stating the vehicle will provide 40 miles for 40 cents through recharging by electrical means. He said the vehicle will get even higher mileage on the highway but did not specify the firm's mileage estimate.
The federal "Cash for Clunkers" program that ended last Tuesday apparently worked better than has been realized, with GM snagging 17.6 percent of new vehicles, second only to Toyota's 19.4 percent.
Those statistics were achieved even though GM did not have a vehicle in the top 10 sales list.
"In July and August, the popular Cash for Clunkers (CARS) program generated substantial demand for a broad range of fuel efficient vehicles within GM, including the Chevy Aveo, Cobalt, Chevy HHR, Malibu, Equinox and Colorado," said Tim Lee, GM vice president for global manufacturing and labor.
CARS took nearly 700,000 vehicles off the road, achieving a 58 percent increase in the average fuel economy of vehicles purchased, according to U.S. Department of Transportation reports.
Cars made in America were most popular in the program, including the Ford Focus, Toyota Corolla and Honda Civic, officials said.
Traded vehicles had average fuel economy of 15.8 miles per gallon and newly purchased vehicles averaged 24.9 miles per gallon. Some 84 percent of consumers traded in trucks and 59 percent bought passenger cars.
GM and Ford announced production increases for the third and fourth quarters as a result of the program and Honda hiked production at several U.S. plants.
"We are running our plants to maintain maximum flexibility and keep production tightly allied with customer demand," said Lee.
The firm will focus on four brands, Chevrolet, Cadillac, Buick and GMC, officials have said.
The main problem facing the Volt is how owners who don't have garages and must park on the street can recharge it, Henderson said in an extensive press interview. (See transcript at http://media.gm.com/us/gm/en/news/press/pr_recent/index.html)
And, the 230 mile per hour figure is for city driving, he said, indicating highway mileage would be even higher.
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