GM Investment Could Mean New Hiring At Orion

"We want to start making small cars in America, in Michigan, for profit again."  -- GM North America President Mark Reuss.

General Motors officially announcing an extra 145 million dollar investment in its Orion township plant, to clear the way for production of a second small car, called the Buick Verano. The UAW indicating that could mean GM would have to hire as many as 600 new workers at the plant, who would earn a lower second tier wage. The plant will employ a total of around 1500 people.

"This is an example of reversing the trend," said Michigan Governor Jennifer Granholm, speaking at a Thursday afternoon ceremony at the plant. The trend Granholm was referring to was doing small car production in low cost countries.

Officials of the UAW say they embrace the change that's coming to Orion.

"This small car production is not an experiment, it's an opportunity," said UAW Local 5960 President Pat Sweeny. "An opportunity to make things right for our company, our union and the American consumer."

The Orion plant was originally on GM's closing list, but the UAW agreed to changes in work rules, and to accept that forty per cent of the plants work force would earn the second tier wage, which is half of the $28 per hour that veteran workers get.

"Because of the joint efforts and creativity of GM and the UAW working together, all traditional employees are expected to have the opportunity to return to work at the traditional level at either Orion Assembly or other facilities needing additional manpower," said a statement relased by the union. "It will not be mandatory for any traditional employee to work at the entry-level rate."

The UAW says there are about 1150 workers on lay-off at Orion, but about 500 are on special assignment at other GM facilities or on temporary assignment. About 300 workers who have 29 or more years of seniority will be offered a special retirement incentive.

The union didn't specify what the incentive would be. GM's Mark Reuss wouldn't get into any specifics about hiring new workers.

(Mark Reuss talks to reporters on Friday's Worldwide Automotive Report.)

"We're gonna get the best people in here like we always to, and go to work," Reuss told WWJ AutoBeat Reporter Jeff Gilbert.

GM gave few details about the new Buick Verano, only saying that it will be built on the same platform as the Chevrolet Cruze, but have Buick styling and luxury.

'It's gonna have completely different sheet metal all the way through it. The interior's quite different," said Reuss, who admitted that GM will have to win over critics who have seen luxury vehicles in the past that were mostly upscale versions of mass market cars.

Analysts who have been given early looks at the Verano have been impressed.

"I've actually seen both vehicles and it does look significantly different," said IHS Automotive's Bragman. "You wouldn't automatically equate it with a Cruze. It does look like a Buick. It is much more luxurious."

Bragman says that Buick needs a small car to attract younger buyers. New products like the Regal and Lacrosse have helped increase Buick sales by 58 per cent so far this year.

The Verano is expected to go on sale in 2012.

The first new vehicle to be produced here is the next generation of the Chevy sub-compact currently called the Aveo.  It's expected to begin production next summer.  GM confirming today that they are considering renaming the vehicle, because it will be substantially different from the current Aveo. 

People often mispronounce the name Aveo, Reuss says, adding that if they make a change, it will be a brand new name, not a name from Chevrolet's past.

Reuss saying they will have room for a third product at Orion, if market conditions warrant it.

"As General Motors begins to recover and make money, we're gonna reinvest that money right here in our state and our country."

Follow WWJ AutoBeat Reporter Jeff Gilbert on Twitter @jefferygilbert.