Christina Rogers/ The Detroit News
Orion Township— General Motors Co. hopes to get more savings out of its small car factory here by getting lean and green.
The Detroit automaker has spent about $600 million to overhaul the 4.3 million-square-foot plant, where two new small cars will begin production this fall — the Chevrolet Sonic
, successor to the Korean-built Aveo, and the Buick Verano.
The retooled factory will reopen as a leaner, more agile operation, using about one-third of the factory floor previously used, GM officials say. It will have more efficient workspaces, in-house suppliers and more foreign-made parts.
GM has outfitted it with some eco-friendly upgrades as well, including better lighting and a new paint shop that uses about half the energy per vehicle as the one it replaced.
Landfill gas will supply about 40 percent of the plant’s power, generating about $1.1 million in savings a year.
“General Motors’ sustainability efforts prove reducing the impact on the environment can also drive costs down and is good for business,” said Maureen Midgley, the company’s executive director for global manufacturing engineering.
The factory will employ about 1,600 people once it’s fully operational, including about 1,400 hourly workers.
Production will start with two shifts, making about 160,000 cars a year, said plant manager Alicia Boler-Davis.
But there’s also plenty of room to grow, and the factory could easily support spillover production of the Chevrolet Cruze, now built at Lordstown, Ohio, Boler-Davis added. GM is running three shifts in Lordstown to build the hot-selling Cruze.
GM also has sought other savings at the plant, hoping to reduce production cost on cars that typically generate very low profit.
The company struck a deal with the United Auto Workers union to require 40 percent of Orion workers to make a lower, $14- to $16-an-hour wage — about half the traditional pay.
GM also is hoping car buyers will spend more to equip the new small cars with more expensive trim levels and features, especially with the run-up in gas prices convincing some consumers to downsize.
“We’re seeing customers who used to own bigger vehicles move into smaller, more fuel-efficient vehicles,” said Margaret Brooks, GM’s marketing director for small cars. “But one of the things we’re seeing is they don’t want to give up anything.”
Brooks declined to say whether GM had reduced costs enough to make money on the subcompact Sonic.
“Obviously, we’re here to make money at every business we participate in,” she added.