General Motors increases small car production in the US


CHICAGO–General Motors announced plans Thursday to increase small car production in the United States, in a victory for its union and politicians looking to boost their chances in upcoming mid-term elections. The United Auto Workers (UAW) union was blamed for helping push the iconic U.S. automaker into bankruptcy last year despite having made major wage and benefit concessions as tens of thousands of jobs were slashed. Those wage concessions helped GM lower its operating costs sufficiently to shift production of a low-margin subcompact car from South Korea to the United States and to retool a factory previously slated for closure. The UAW said the factory — and GM — could not have been saved without President Barack Obama and the Democratic leadership’s “commitment to the American auto industry at the point when most thought the industry was dead.” Obama presided over a US$50 billion bailout and a swift restructuring of GM, which is expected to launch an initial public stock offering shortly after the Nov. 2 elections. “While detractors wanted to let auto plants close and leave American workers jobless, industry supporters such as Michigan Democratic gubernatorial candidate Virg Bernero stood up for American auto workers and helped make this exciting investment and new jobs for Michigan possible,” Joe Aston, the UAW vice president who directs the union’s GM Department, said in a statement. The US$145 million investment in the Lake Orion, Michigan assembly plant will help retain 1,670 jobs, GM said in a statement.

It will be used to add a new car to the assembly line: the Buick Verano compact luxury sedan. The Verano will be the first small car added to the Buick lineup in 20 years. “GM has worked closely with the United Auto Workers to create new and innovative contractual language that will allow this facility to be flexible and lean — essential elements in the highly competitive, small car market segment,” the automaker said in a statement. Originally slated to close at the height of the 2008 economic collapse, GM announced plans in June 2009 to retain Orion and retool it to build the subcompact Chevy Aveo, which had previously been built in South Korea. The total investment in the plant, which should begin production in mid 2011, is US$600 million, GM said.