General Motors Co GM.UL is investing $145 million to reopen a Detroit-area assembly plant where it plans to build a new Buick compact car and a smaller Chevrolet subcompact, GM's president for North America said on Thursday.
Both vehicles will be made at GM's Orion Township plant under a cost-cutting deal with the United Auto Workers union, intended to pave the way for the top U.S. automaker to make smaller and lower-margin cars profitably.
Separately, GM's president for North America said the automaker may rename the Chevy Aveo, which could help shake the mostly negative consumer associations with the current-generation subcompact manufactured in Korea.
The Aveo has been criticized for poor handling, styling and quality, with Consumer Reports calling it "a miserable little car" in 2008.
"We are considering and looking at other names for it," Mark Reuss told reporters at an event at the GM plant where the Chevrolet and Buick small cars will be built.
Reuss said past model names were "probably not" under consideration and that he had been considering dropping the Aveo nameplate since he took the top job in North America.
"I think this is a breakthrough car and that's the reason," Reuss said. "We have to do something really new and innovative and fresh and fun."
GM plans to begin production of the new Chevrolet subcompact first, followed by production of the Buick Verano, the first new Buick small car in 20 years.
Reuss said the Verano would be built on the platform being used now for the Chevrolet Cruze.
But the Verano will have a completely different styling and interior with a ride and quietness on par with other Buick vehicles, Reuss said.
The Orion plant formerly produced the now discontinued Pontiac G6 sedan, and was a backup production plant for the Chevrolet Malibu. The plant was closed in 2009 because of the recession and declining auto sales.
A third vehicle could be in the plans for the future, Reuss said.
Production of the two small cars will create 1,550 jobs at the Orion assembly plant and another 120 jobs at the Pontiac Metal Center facility nearby, GM said.
The UAW offered GM extraordinary concessions to make the deal viable for the Orion plant, allowing that some 40 percent of UAW employees would work at a second-tier wage on the Chevrolet program.
The UAW said on Thursday that about 300 Orion assembly plant union workers with 29 or more years seniority would be offered buyouts.
The union said about 1,150 UAW workers had been laid off from the Orion plant. About 500 of them had been temporarily assigned to other GM facilities.
GM will offer them the opportunity to return to work based on seniority, the UAW said.
Plans to restart the Orion Township plant come as GM moves toward an initial public offering of stock expected to reduce the U.S. government's 61 percent ownership stake.
