GM not to import China-made compact cars to US

Shanghai, June 5 (Gasgoo.com) General Motors has made a concession to the United Auto Workers union (UAW) and decided not to import small vehicles from China to the U.S. market, Beijing Times said today. Instead, GM plans to make all-new subcompacts locally in the U.S.

GM previously planned to produce up to 51,000 Spark subcompacts annually in Chinese venture Shanghai GM and ship them to the U.S. starting 2011. But later last week, the UAW said GM had agreed not to import cars from China and will make all-new subcompacts in the U.S., as part of GM's concession deal with the union.

GM will reopen a shuttered U.S. factory to build the subcompact cars that will be the smallest vehicles GM has ever produced in the U.S. The mini vehicle will be a B-class product, and it may be Chevrolet Spark or next-generation Chevrolet Aveo's new version. GM now imports the Chevrolet Aveo subcompact from South Korea.

The plant, after resuming operation, will produce 160,000 vehicles per year. But GM did not tell which plant it is. The reopened factory will create 1,200 jobs, offsetting some of the 21,000 to be lost when GM closes 14 factories by the end of next year.

The UAW has also reached an agreement with GM upon the further reduction of labor cost. GM CEO Henderson said the UAW concessions ensure GM's manufacturing competitiveness in the U.S., where "small cars represent one of the fastest-growing segments," he added.

GM's earlier plan to make the Spark in China and ship it to the U.S. drew criticism from the UAW and some members of Congress. The plan was a political problem, with the UAW saying it was wrong to take U.S. taxpayer loans and then ship jobs overseas.