Corp., hoarding cash ahead of a government loan package to keep it from tumbling into bankruptcy, suspends hold major construction activity at a facility supplying 4-cyl. engines to its upcoming Chevrolet Volt extended-range electric vehicle and all-new Chevy Cruze compact car.
GM previously said the two product programs, both slated to arrive in 2010, would remain on track despite a massive cost-cutting effort amid record-low vehicle sales.
GM spokeswoman Sharon Basel reiterates the timetable, saying the auto maker has on hold only heavy cash outlays for the project, such as structural steel purchases.
“This has nothing to do with a delay in the production start or timing of either product program,” she tells Ward’s. “With so many unknowns out there, it is a very prudent action to minimize cash outlays. We’re cash-strapped.”
Basel says both programs have reached a point where GM must begin some major spending, but it remains unclear whether an estimated $14 billion government loan package for the auto maker and cross-town rivalLLC will arrive.
President Bush pledged help for the auto makers, which will fall short of the cash needed to operate their businesses by the end of the year, after a rescue package died last week in Congress. Funds were expected today, but reports this afternoon out of Washington suggest help may not arrive until the end of the week as lawmakers hammer out details of a deal with the White House.
In the meantime, Basel says nominal activities surrounding the engine plant will continue, such as site surveys, installation of perimeter fencing and the laying of access roads. GM could catch up on other activities quickly, she adds.
“As GM Powertrain has expanded globally, we have a developed a template, or playbook, if you will,” she says. “One is done just like the one before it, so we can get these facilities up quickly.”
GM started construction on the 552,000-sq.-ft. (51,282-sq.-m) brownfield site shortly after breaking ground in September. It will build both turbocharged and naturally aspirated 1.4L mills.
GM will build the ’11 Chevy Volt in Hamtramck, MI, according to a document from its negotiations last year with the United Auto Workers union, beginning in late 2010. Production of the ’11 Chevy Cruse will begin in mid-2010 at the auto maker’s Lordstown, OH, facility.