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GM Might Sell Chevy Volt Technology in Future, CEO Says

Fritz Henderson invites organized labor to represent hourly workers at the auto maker’s new $43 million battery-pack assembly plant.

BROWNSTOWN TWP., MI – General Motors Co. President and CEO Fritz Henderson says he does not “rule out” selling lithium-ion battery packs to other manufacturers from the auto maker’s new plant south of Detroit, as well as other technologies to be used in the upcoming Chevrolet Volt extended-range electric vehicle.

However, such a strategy would be difficult because the pack’s T-shaped design is unique to the Volt. Henderson also does not rule out union representation at the plant, which as a wholly owned subsidiary does not fall under the national master labor agreement.

Some experts have suggested sharing Volt technology as a means for GM, fresh from a 39-day trip through bankruptcy, to widen its revenue stream, but Henderson disagrees.

“I wouldn’t rule that out if the opportunity were to arise,” he says, “but I wouldn’t necessarily see that as a large revenue stream.”

Henderson echoes the same sentiment regarding the Volt’s larger propulsion system, called Voltec. GM has said the technology will be used in an Opel Ampera C-car for the European market in 2011.

The auto maker also is contemplating a Voltec version of the Cadillac Converj concept car shown at the 2009 North American International Auto Show in Detroit, and reports surfaced last week Voltec could be used in the Chevy Orlando 7-passenger multipurpose vehicle coming to the U.S. in 2011.

“Our first job is to actually get (Voltec) into production ourselves,” Henderson tells Ward’s.

“The cost of Generation I technology is relatively high, so we need to get it down to Generation II. That’s our focus today. I don’t rule out anything in that regard (selling electric-vehicle technology), but our focus is getting ourselves into production.”

Local and state incentives, as well as a portion of the $105.9 million grant package GM received from the U.S. Department of Energy last week, will help pay for new machinery, equipment and special tooling for the 160,000-sq.-ft. (14,864 sq.-m) battery-pack plant. GM will lease the building using some of those funds.

The Volt is scheduled to start production in late 2010 as an ’11 model. It is designed to travel 40 miles (64 km) in full electric mode before a small internal combustion engine turns over to give it another 300 miles (483 km) of range.

Yesterday, GM said the combination provides the Volt with a fuel economy rating of 230 mpg (1.0 L/100 km) in city driving.

Meanwhile, Henderson is inviting organized labor to represent hourly workers at the $43 million battery-pack assembly plant here, despite the fact United Auto Workers wages traditionally have been costly for GM, which is trying to price the Volt as inexpensively as possible to create volume.

UAW officials did not attend the unofficial opening of the plant earlier today and spokeswoman Christine Moroski declines comment. The facility will employ 100 people, both hourly and salary, when production gets under way in second-quarter 2010.

“The hourly employees have not been hired (yet),” Henderson tells Ward’s. “(They) will be hired, and they have to decide if they want the union to represent them. If they do, we’re confident we’ll be fully competitive here.”

GM wants to bring the Volt to market priced under $40,000, which combined with an available $7,500 federal tax credit puts it within reach of a good number of consumers.

But to get the volume necessary to make the Volt program profitable – GM does not expect to make money on the program in its first generation – technology costs must be reduced.

GM earlier this year said it would need creative labor agreements to produce electric vehicles profitably. A GM facility in Orion Twp., MI, was awarded a yet-to-be identified B- and C-car on the strength of UAW concessions, as well as tax breaks from the state.

GM also brokered a new agreement with the UAW two years ago, clearing the way for the auto maker to hire union-represented labor at nearly half current wages.

Henderson says the battery-pack plant, a wholly owned subsidiary of GM called GM Subsystem Mfg. LLC, will be staffed by new hires under the agreed-upon “second-tier” wage rate or within a structure under which it operates other component-making facilities.

“We have a series of agreements with the UAW in components manufacturing, whether it’s our second tier or some of the other innovative things we’ve done with the UAW in component manufacturing, which is why I’m 100% confident we’ll be competitive here,” he says.

“This is a General Motors facility, it’s a General Motors subsidiary, and if the people choose to be represented by the UAW we welcome that,” Henderson adds. “I think they would work under a competitive wage and benefit agreement.”

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