GM’s U.S. Small-Car Plan Won’t Hurt GMDAT

The new U.S. model “would be an addition to (the lineup) and not a replacement for what we have planned in Korea,” CEO Michael Grimaldi tells local media.

Vince Courtenay, Correspondent

June 3, 2009

3 Min Read
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General Motors Corp.’s plan to build a new small car in the U.S. by 2011, part of its new labor agreement with the United Auto Workers union, will not impact the auto maker’s operations in South Korea, a top executive says.

GM Daewoo Auto & Technology Co. CEO Michael Grimaldi tells local media the new model, destined for a U.S. plant previously slated to be closed, “would be an addition to (the lineup) and not a replacement for what we have planned in Korea.”

The vehicle has not been identified, but GM says it will build the new model at one of three plants that will go on standby as part of its restructuring plan: Spring Hill, TN, (Chevrolet Traverse), Orion Township, MI, (Pontiac G6) and the currently idled Janesville, WI, facility.

Some analysts believe the vehicle will be the newly developed T-300 replacement for GMDAT’s best-selling Aveo. The current Aveo, redesigned in 2007, is GMDAT’s sales leader in both the U.S. and Europe.

A GMDAT spokesman says the Aveo production launch planned for Plant No.1 in Bupyeong, South Korea, has been delayed until sometime in 2011. He would not comment on any U.S. production plans.

Earlier plans had called for the T-300 Aveo replacement to have its Korean production launch this year, with exports to the U.S. beginning in April 2010.

Timing for the T-300 launch in Korea is up to GM in the U.S., because it is considered a “global program” not a GMDAT program, the spokesman says.

Replacement for current Aveo one possibility for U.S. plant.

The current Aveo is produced in Bupyeong and at the Shanghai GM Dongyue plant in China, where it is sold as the Chevrolet Lova. The car is built as the Holden Barina in Australia and sold as the Chevrolet Aveo and Pontiac G3 in North America.

The Aveo also is assembled from complete-knocked-down kits shipped from Korea to the San Luis Potosi, Mexico, plant, as well as at facilities in Egypt, Russia, Venezuela and Ukraine.

The GMDAT spokesman confirms the much-awaited Chevrolet Spark minicar, built on the same platform as the Aveo, also is on track.

The Spark goes into production at the Changwon, South Korea, plant in mid-August. It will be produced alongside the present Matiz, which it will replace in most markets.

The Spark will have its domestic sales launch late in the third quarter. Exports will begin late in the fourth quarter, the spokesman says.

Some analysts say the Spark also may be produced in the U.S. and that GMDAT's Orlando 7-passenger cross/utility vehicle should not be ruled out, either.

The Orlando program is “well under way,” and the vehicle is scheduled for a U.S. sales launch in 2011, the spokesman says.

The Orlando will be built at the Gunsan, South Korea, plant "for domestic sale,” he says, declining comment on whether it will be supplied to the U.S. from that facility or also built elsewhere.

The Orlando shares the Delta platform with the Chevrolet Cruze, which will be produced at GM’s Lordstown, OH, plant beginning in April 2010.

Grimaldi also tells local media he is now optimistic GMDAT will obtain new financing from the Korea Development Bank within the next 60-to-90 days.

“Michael has met with (the) KDB twice in the past five days and updated them on the GM filing,” the spokesman says. “(The) KDB said they wanted more clarity and now they have the clarity.

“(The) KDB is now very proactive,” he adds. “They are eager to get into discussions and proceed on a fairly quick timetable.”

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