General Motors Postpones Construction of Volt Engine Plant

General Motors (GM) has postponed its Flint, Mich., plant that was to make engines for its Chevy Volt vehicle, FOX Business has learned.

GM confirmed to FOX Business’s Jeff Flock that it had cancelled construction contracts on the plant, saying it does intend to move forward with the new plant at some point, but because of economic conditions it is halting construction at this time.

It’s “part of the tough, wrenching decisions being made in Detroit these days. On the positive side, the urgency they are facing now is forcing these types of difficult decisions which in the end are probably best for the health of the company,” a source told Flock.

GM said it is “not ruling out” the possibility of making the Volt engine at its existing Flint engine plant.

The Volt, an electric car that GM has trumpeted as a big part of its future success in a world gravitating toward energy efficiency, was scheduled to be ready by 2010, but this development leaves its future up in the air.

Also, GM and the United Auto Workers union are going to drop their Jobs Bank program, effective Feb. 2. There are 1,600 people currently in the program, and they will become officially unemployed.

The jobs bank program started in the 1980s. It basically guarantees some pay for workers who were laid off because of plant restructurings or technological advancements, and was seen as a deterrent to actual layoffs.

However, as the auto industry started to undergo upheaval, the jobs-bank program came under fire as an impediment to the financial viability of the auto makers. Ending the jobs bank program was one of the conditions set out by Washington in order for GM to get its $13.4 billion in emergency bridge loans, but the end date and number of people affected were not known until now.

source : Foxnews.com