DETROIT -- A $245 million investment slated for a Detroit-area General Motors plant will go to a Kansas facility instead, leaving one of GM’s primary small-vehicle factories with a light workload.
GM said in June that it would upgrade its Orion Assembly plant near Detroit in preparation for an undisclosed, all-new vehicle by 2018. Sources at the time told Automotive News that the vehicle was a Cadillac small crossover.
GM said late Monday that the investment would instead be made at its Fairfax Assembly plant in Kansas City, Kan. The company did not identify the vehicle.
The switch is “part of our ongoing product allocation process to build vehicles as cost-effectively as possible to benefit our customers and the business,” a spokeswoman said in an email. “The $245 million investment will go to Fairfax for the new vehicle program.”
Orion workers were notified in January, the spokeswoman said. The Wall Street Journal reported on the plans earlier Monday.
It was the latest dose of bad news for the roughly 1,100 workers at the Orion plant, where the Chevrolet Sonic subcompact and Buick Verano compact are built. Early this year, GM eliminated a shift at Orion amid weak demand for small cars.
Verano's U.S. sales fell 9.4 in the first quarter, but Sonic sales grew 11.6 percent.
On Monday, the Detroit Free Press reported that Verano production is expected to be phased out at Orion beginning in the fall, citing a union official. Several production-forecasting firms predict that GM will move Verano production to a plant in Mexico.
That would leave the 4.3-million-square-foot plant with only the Sonic and Chevy Bolt EV, which recently began pre-production. Bolt sales are scheduled to begin in the fourth quarter.
GM idled Orion around the time of the company’s 2009 bankruptcy. Production resumed in 2011 under pact with the UAW that allowed Orion to become the only U.S. plant to build subcompact vehicles, which generally carry little or no profit margin.
The plant has a high number of lower-paid, so-called Tier 2 workers, for example, and uses on-site workers from outside suppliers who make even less money.
GM has invested more than $700 million into Orion since 2010, including about $160 million to prepare for the Bolt EV launch.
