Factory for Chevy Volt engine on hold

To cut expenses, General Motors delays plans to build a new plant to manufacture engines for the electric Chevy Volt. Meanwhile, Chrysler halts production for month.

Cash-strapped auto giant General Motors has put plans on hold for a new factory to build the Chevy Volt engine, according to a report.

The Flint Journal of Flint, Mich., reported on Wednesday that the move is part of GM's efforts to reduce expenses as it appeals to the White House for federal aid .

General Motors' Chevy Volt. GM decided to delay plans for a new factory to build the engine. GM

"Given the situation that GM is in right now, all expenditures, anything that involves capital, is under review," GM spokeswoman Sharon Basel told the newspaper. "And such as the case with the Flint engine plant."

Basel added that GM still plans to start production of the Volt, a gas-electric car, in November of 2010. GM calls it a range-extended electric vehicle because it runs on batteries. The engine acts as a generator to recharge the batteries for rides beyond 40 miles.

Three months ago, GM announced that it would construct a new plant to manufacture the engine for use in the Volt and the Chevrolet Cruz, another highly touted fuel-efficient car.

The engine could still be manufactured at another plant in Flint, the city's mayor told the Flint Journal.

Separately, Chrysler said on Wednesday that it will close down production for a month in a bid to lower its expenses, according to reports.

Both Chrysler and GM--which are said to have explored a merger--are suffering from a sharp drop in sales in the past few months. They are seeking to reduce their costs and secure "bridge loans" from the U.S. government.

 

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