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GM Now Says It Plans to Build a Small Car in U.S.

Bowing to UAW pressure over planned Asian imports, the company will reopen an as yet unnamed plant.

by on May.29, 2009

Chevrolet announced production plans for a new vehicle - the Chevrolet Spark - a fuel-efficient mini-car based on the Beat concept that will arrive in dealer showrooms in 2011.

Chevrolet announced production plans in January for a new vehicle - the Chevrolet Spark - a fuel-efficient mini-car based on the Beat concept that will arrive in dealer showrooms in 2011.

General Motors Corporation announced today that it plans to build a future small car in the United States in an idled UAW-GM plant. The unnamed small car will be built in an unnamed facility. 

By making the announcement today, GM is clearly bowing to pressure from the United Auto Workers Union, and also trying to smooth the way in Congress for a bankruptcy filing that is expected to come this Monday.

U.S. taxpayers will own 72.5% of a New GM. Importing cars from Korea, China or Japan – all closed markets  to U.S. autos – with taxpayer dollars is politically controversial, to understate the issue facing the Obama Administration.

The United Autoworkers Union on May 18 sent a letter to members of the U.S. Congress objecting to the centerpiece of GM’s Viability plan – closing 16 plants in the U.S. and importing vehicles from low-wage, non-unionized countries.

The factory closings were not new, they have been in various versions of the plan since GM went to the U.S. government for bridge loans late, last year, but in bringing the argument over the closings public, the union was attempting to prevent some of them through political pressure after apparently being shut down at the bargaining table.

The strategy worked. About 1,200 UAW jobs will be saved,  although more than 20,000 UAW jobs are eliminated in the current version of GM’s viability plan.

“Small cars represent one of the fastest growing segments in both the U.S. and around the world,” said Fritz Henderson, General Motors President and CEO. “We believe this car will be a winner with our current and future customers in the U.S.”     (more…)