GM halts Mich. plant due to engine problems

Wednesday October 2, 5:19 pm ET

By Michael Ellis

ORION TOWNSHIP, Mich., Oct 2 (Reuters) - General Motors Corp. halted production this week at its Hamtramck, Michigan assembly plant, where it makes the Buick LeSabre and the Cadillac DeVille and Seville luxury large cars, due to an engine problem, officials said on Wednesday.

GM detected a problem with the V-8 engine in DeVilles and the Sevilles on Friday, and stopped production on Monday while it worked with its supplier responsible for the fault to find a solution, officials said.

"It's not a catastrophic issue, but it is a quality issue. We think we've got it solved. We think the plant will be up here anytime, maybe even as early as tonight," Jerry Elson, GM's vice president of vehicle operations, told reporters at a press conference to announce a $300 million investment in the automakers Orion assembly plant.

Elson declined to elaborate on the problem with the V-8 engines. GM officials said that all the Cadillacs with the affected engines were contained at the plant and being fixed. None were sent to dealerships, they said.

The Buick LeSabre, also made at the metro Detroit plant, was unaffected by the problem, but its production was also halted. GM also makes the LeSabre at its Orion assembly plant about 25 miles (40 kilometers) northwest of Detroit.

Production could resume as early as Wednesday night, but is more likely to start again on Thursday, GM spokesman Pat Morrissey said.

Production of hundreds of the Cadillacs and Buicks, among GM's most profitable cars, has been lost this week, but Morrissey said that production would be made up later.

Elson was in Orion to announce GM's $300 million investment in the assembly plant there to add a second shift of workers and move production of the next-generation Pontiac Grand Am to the facility in 2004.

GM said it will renovate and retool the plant's general assembly area, body and paint shops.

Employment at the plant will rise to as many as 2,500 hourly workers from about 2,000 now, Elson said. Before GM cut back to one shift of workers from two in April, the plant employed more than 4,000 hourly workers.

Production of the next-generation Grand Am will begin at Orion in the second half of 2004. GM will move production of the Grand Am from its Lansing, Michigan assembly plant, which also makes the Chevrolet Malibu mid-size car.

Production of the next-generation Malibu will move to GM's Fairfax assembly plant outside Kansas City. The Lansing plant will downsize to a single shift of workers building the current generation of the Malibu for a short time. Meanwhile, GM will build a new assembly plant near Lansing, the Delta Township plant, to make crossover sport utility vehicles, officials familiar with the plans said.

The Orion plant builds the Pontiac Bonneville, Buick LeSabre, Buick Park Avenue and Oldsmobile Aurora large cars. Production of the Bonneville and the LeSabre is expected to be shifted to the Hamtramck plant in 2004, analysts said. The Aurora will be discontinued as part of the phase-out of the Oldsmobile division, while the Park Avenue faces an uncertain future and could be dropped, analysts said.