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AP source: GM to build small car in Michigan

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AP source: GM to build small car in Michigan

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By TOM KRISHER, AP Auto Writer Tom Krisher, Ap Auto Writer – 27 mins ago

DETROIT – Michigan has won the high-stakes competition with two other states to build General Motors Corp.'s next-generation subcompact car, a person briefed on the decision said Thursday.

The announcement that the car will be built at a retooled midsize car factory in Orion Township near Pontiac will come Friday, said the person, who spoke on condition of anonymity because the plan has not been made public. It will save about 1,200 jobs at the factory, which had been slated to shut down later this year.

GM spokeswoman Sherrie Childers Arb declined to comment on whether GM had made a decision. The top government official in the county where the Orion plant is located said he has a phone call scheduled with GM at 9 a.m. Friday.

"We had stiff competition from Tennessee and Wisconsin," said Oakland County Executive L. Brooks Patterson. "I think the impact of reopening that plant and making the small car here will have a huge long-term effect not just on Oakland County but southeast Michigan and help us address some of the real serious employment issues that we have in this region."

The Orion plant, about 40 miles north of Detroit, had been in competition with GM factories in Janesville, Wis., and Spring Hill, Tenn., to build the car.

The Orion plant now makes the Pontiac G6 and Chevrolet Malibu midsize cars, but the Pontiac brand is being discontinued and the Malibu is also made at factory in Kansas City, Kan.

GM announced when it filed for bankruptcy protection June 1 that the Orion and Spring Hill plants would go on standby status later this year, meaning workers could be called back if the company needs to increase production. The Janesville plant already closed in April.

GM also is likely to announce that its Pontiac parts stamping plant will be retooled to make parts for the new car, based on the Chevrolet Spark. About 1,000 jobs could be saved there.

Michigan, Wisconsin and Tennessee all offered incentive packages to GM in an effort to lure the plant.

All 17 members of Michigan's congressional delegation sent a letter to GM last week saying that the state's economic woes — including an unemployment rate that hit 14.1 percent in May — made the project important for Michigan. They also said it was a sound business decision.

The delegation made the point that GM plans to close or put on standby seven of its Michigan factories by the end of 2010, including three in Oakland County, home to the Orion plant. It said GM could mitigate some of the consequences for workers and surrounding communities by moving production of its subcompact car to Michigan.

State officials wouldn't describe the incentive package it presented to GM.

A spokeswoman for Michigan Gov. Jennifer Granholm declined to comment on whether the state had been chosen. "The governor has said from day one that we're going to be aggressive in going after this project and these jobs it will create," said the spokeswoman, Liz Boyd.

Tennessee Gov. Phil Bredesen's spokeswoman, Lydia Lenker, said late Thursday that their office had not been notified of GM's decision.

Earlier Thursday, Bredesen said the state's incentive bid was "nothing like" what GM had originally sought. Bredesen told reporters earlier this month that his impression from meetings with GM officials was that the company wants a large cash payment and not long-term tax breaks.

Lee Sensenbrenner, a spokesman for Wisconsin Gov. Jim Doyle, declined to comment.

GM had said in documents submitted to Congress that it planned to produce up to 51,000 subcompacts per year in China and ship them to the U.S. starting in 2011.

But in May, after the United Auto Workers union approved contract concessions, the company said it would build the three-door hatchback in the U.S. The Spark has a small turbocharged four-cylinder engine and is about the size of a Honda Fit or Toyota Yaris. It is set to go on sale in Europe next year.

GM's decision leaves about 2,500 Spring Hill employees wondering what is next for them. Their plant recently underwent a $600 million overhaul to build the Chevrolet Traverse, but that crossover vehicle will now be built at a factory near Lansing, Mich.

Todd Horton, spokesman for UAW Local 1853 in Spring Hill, said "no one is going to comment until we get the official announcement."

He said a news conference was planned for Friday morning at the union hall to discuss the employees' futures.

The Janesville plant shut down SUV production last December, putting about 1,200 people out of work. It closed entirely after completing some contract work in April.


Associated Press Writers Kathy Barks Hoffman in Lansing, Mich., Todd Richmond in Madison, Wis., Erik Schelzig in Nashville, Tenn., Bill Poovey in Chatanooga, Tenn., and Ken Thomas in Washington, contributed to this report.

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What are they going to make there the Beat?

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Already knew this......

But spring hill is not done yet....

Agreed, they may idle it, and I suppose I could see them selling it if they could get the right price, but it won't just be shut down permanently. Far too nice of a factory.

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Spring Hill is one of those places that could build anything GM wants. Once they get their wheels spinning again, they may use it for something.

Honestly, Michigan really needs employment. They are in such bad shape.

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MI is a good PR move at a time GM needs it.

Also I suppose they did get a good offer.

Spring hill is not dead and I expect to hear in the future a new car being built there. Like stated it is one of GM's best and most modern plants so I do not see it being sold or shut down long.

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