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Thu May 19, 2011
Energy-efficient GM Orion plant ready to build fuel-efficient (and profitable) cars
Orion Assembly workers will be producing a new subcompact car for General Motors in about a month at the automaker's newly-renovated plant in Lake Orion.
GM doesn’t plan to lose money on the Chevy Sonic, even though small cars are less profitable --which is why other major car companies make their smallest cars in lower-cost countries.
For one thing, labor costs at Orion are lower than most other GM plants because of a special contract with the UAW. 40% of the workers will be so-called "tier 2," meaning they're paid about $14 an hour.
That's half what "tier 1" workers are paid.
And both the cars that will be built here, the Sonic, and the Buick Verano, are built on global platforms, which means lower development and supply costs because of economies of scale.
GM's Margaret Brooks points out that high fuel prices hurt automakers, too, if they have to transport cars from far-away places like Mexico.
"If you even think about rising fuel prices and impact it has on us as a business, there’s certainly cost savings associated with lower logistics, so when you look at the whole proposition together, this was a great business proposition for us."
The plant will be one of GM's most environmentally-friendly in the U.S.
GM gutted Orion Assembly and rebuilt it almost from the ground up. The plant now uses less lighting, less space, and even less effort by workers.
Orion Assembly will also get most of its energy from methane from two nearby landfills. Al Hildreth is Energy Manager for GM’s North American plants.
" If you look at the alternative of boiling coal in a boiler, which we used to do, it’s much less emissions, and the contract is saving us money, too."
Mass market production of the Sonic begins in about a month. Production of the Buick Verano, a small car with more luxury features than the Sonic, will begin in November.