GM to Invest $336 Million in Detroit-Hamtramck Volt Assembly Plant

DETROIT, Dec 7, 2009; Soyoung Kim writing for Reuters reported that General Motors Co [GM.UL] will invest $336 million in a Detroit-area plant to produce its heavily anticipated Chevrolet Volt electric car beginning next year, the No. 1 U.S. automaker said on Monday.

Assembly of Volt prototype vehicles will begin in the spring at GM's Detroit-Hamtramck assembly plant, with the regular production scheduled for late 2010, GM said.

The plant currently employees about 1,200 workers, including 1,100 hourly workers represented by the United Auto Workers union.

GM said the investment brings the automaker's combined spending in Michigan related to the Chevy Volt plug-in car to $700 million.

GM is counting on the Volt and other upcoming fuel-efficient vehicles such as the Chevy Cruze small car to revitalize its lineup as it restructures after emerging from bankruptcy in July.

The Volt is designed to run for 40 miles from a single charge of a lithium-ion battery pack. When the battery is depleted, a small combustion engine kicks in to recharge the battery and power the vehicle.

The Volt, set to go on sale in November 2010 in the United States and later in Europe, has attracted intense interest as one of the first rechargeable, battery-powered vehicles set to launch in the United States.

But GM officials have also downplayed expectations for the Volt's commercial success because of the vehicle's steep development costs, high sticker price and limited production.

GM Vice Chairman Bob Lutz said last week at the Los Angeles auto show that he sees limited sales of electric cars over the next five years and that GM will ramp up output of the Volt plug-in cautiously.

GM would build 8,000 to 10,000 Volt models during the first full year of production, with an eventual ramp-up to 50,000 to 60,000 units annually, Lutz said.

GM executives have said the Volt could cost about $40,000 before a consumer tax rebate of $7,500.

Editing for Reuters by Matthew Lewis