GM Accepts Loan Package; Building New Plant in Flint

FLINT, Mich., Sept. 25 -- General Motors CEO G. Richard Wagoner Jr. said Thursday that the automaker should be able to put to good use its portion of a $25 billion government loan package for new technology.

Speaking to reporters at a ceremony announcing a new engine plant in Flint, Wagoner said many of the loan program's specifics still must be written by the U.S. Department of Energy, but that GM can live with the version the House approved Wednesday.

"We'd like to see them written to include all new technologies with significant improvement in fuel economy, but the legislation does have specific guidelines as well," he said.

GM is developing the Chevrolet Volt, a rechargeable electric car that can run up to 40 miles on battery power, with a small internal combustion engine powering a generator to run the car after that. The automaker also is spreading its dual-mode gas-electric hybrid system to more models.

"These are the kind of things that are going to make huge steps forward in fuel economy, so those kind of things, I think, should be eligible for support," he said. "What is not clear is what other kind of things," including parts suppliers, he said.

Wagoner said the new plant will build a 1.4-liter four-cylinder engine that will extend the range of the Volt, and a turbocharged version that will power the Chevrolet Cruze, a new compact car to be built in Lordstown, Ohio.

"This will be one of the places. You will be one of the teams that help GM lead into our second century," Wagoner told workers and government officials gathered for the announcement.

Production at the new $370 million plant will begin in 2010, and both cars are slated to go on sale in the same year.

Workers from the nearby Flint Engine North plant that closed last month said the announcement is good news for an area hard hit by auto job losses.

Although GM said the plant won't create any new jobs, it will retain about 300 hourly positions, and workers said they are hopeful that the new plant will create more employment in the industrial city about 50 miles northwest of Detroit.

"This also means that there's a future for our youth in this area," said Jean Adams-Anderson, a United Auto Workers union representative at the Flint Engine North complex.

The state of Michigan on Tuesday approved $132.5 million in tax incentives for the automaker to spend $838 million on the new plant and to upgrade four other facilities, including the Detroit-Hamtramck assembly plant where the Volt will be built.