Retooling Orion for the two new small cars has already started

Retooling Orion for the two new small cars has already started

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General Motors is to spend US$145m on its Michigan Orion Assembly Center - the production site for Chevrolet's new Aveo small car and Buick's future compact Verano sedan, derived from the Chevy Cruze which recently went into production in Ohio.

"Verano will bring premium styling, performance and content to Buick buyers wanting a smaller car than Regal," GM North American president Mark Reuss said at an event at the plant on Thursday evening (7 October).

"The investment in Orion Assembly also extends GM's local small car footprint, again increasing the number of US-made small vehicles available in showrooms."

Reuss later told reporters the automaker was considering renaming the subcompact Aveo, currently imported from Korea, which has been redesigned for the 2012 model year from which point it will be US-made. It was revealed in production form at the Paris motor show last week and will be the smallest GM makes in the US.

Reuss said a new name would reflect the depth of the redesign of the GM-DAT Korean-designed Aveo which has suffered a lacklustre reputation but is not an uncommon sight in US traffic.

He dropped no hints as to what the new car will be called — other than to say GM won't revive an old name, the Detroit News reported.

The investment to retool Orion will retain 1,550 hourly and salaried jobs at Orion, along with 120 jobs at GM's Pontiac Metal Centre.

In June last year, GM announced that Orion would build "the next generation of Chevrolet's new small car". The total investment for that programme is around US$600m, which includes the Verano.

Orion Assembly is in the process of retooling the plant, which last built GM mid-size sedans and closed last November, for the new small cars. The improvements are expected to be finished by summer 2011.

The automaker said it had had worked closely with the United Auto Workers union.

"The UAW welcomes the news of an additional vehicle being allocated to the Orion Assembly Plant," said the union's GM department chief Joe Ashton.

But the Verano production news wasn't without controversy, the Detroit News noted. For the first time, workers recalled to the plant will be paid according to a two-tier scale based on seniority. Sixty percent of workers will receive the traditional $28 an hour wage, but the remaining 40% will receive about half that.

In the 2007 contract, the UAW negotiated tiered pay for new recruits only but a revision in 2009 gave GM and the UAW leeway to set pay and staffing at its small car plants so they can be profitable.

"That success now means that working together, GM and the UAW are able to bring, for the first time, production of a small, energy-efficient car, the Aveo, from South Korea to the GM plant," UAW president Bob King said in a statement.

GM declined to reveal details of production or timing for the Verano and the new small Chevrolet.