GM Invests $121 Million Into Chevrolet Volt’s Hamtramck Assembly Plant To Bring Down Costs

4 years ago by Jay Cole 19

New Hamtramck Assembly Plant Upgrades Will Arrive Just In Time For 2015 Model Year Chevy Volt Production - Another MSRP Drop Headed Our Way?

New Hamtramck Assembly Plant Upgrades Will Arrive Just In Time For 2015 Model Year Chevy Volt Production – Another MSRP Drop Headed Our Way?

Over the past three years of the Chevrolet Volt’s life we have seen a couple price reductions – down more than $6,000 in total to $34,995 – and GM has said there is still yet more to come.

While Most "New Money" Is To Augment and Begin New Production, DHam Money Is Allocated To Bringing Costs Down.

While Most “New Money” Is To Augment and Begin New Production, DHam Money Is Allocated To Bringing Costs Down.

And while the bulk of the savings thus far have come from reductions in the cost of acquiring the Volt’s 16.5 kWh batteries and related systems, GM has to now look past the “price per kWh” to ultimately continue to reduce pricing to compete in this very aggressive plug-in segment.

After all, how much could the pack and electric drivetrain actually cost GM at this point when you have Mitsubishi retailing the 16 kWh 2014 i-MiEV from $22,995 and smart valuing the ED’s 17.6 kWh battery from $5,010 (retail) to the customer?

Put another way, the costs associate ‘around’ the electric infrastructure of the Chevrolet Volt are now the most expensive issues…and one that GM is now looking to tackle.

In order to achieve more productivity right across the company, GM has announced $1.3 billion worth of new investments around the country.  And while the bulk of the money (almost $1 billion) is going to two plants for upgrades (Flint and Romulus) and to add a new 10 speed automatic transmission to the lineup (also at Romulus), $121 million is going to the Volt’s plant in Hamtramck for something completely different – a “logistics optimization center.”

Decoding GM-speak as to what a “logistics optimization center” is, and why does the plant need one:

Basically, General Motors is adding about 450,000 square feet to the plant (bringing it over the 4 million sq ft mark), that would allow parts and products to be stored and sequenced on site for assembly – saving costly transportation and third party staging and storage.

Also part of the plan is extending a railway line off right into the Hamtramck assembly plant from a nearby main line – again saving on transportation costs.  Currently, two warehouses stock and supply production at DHam.

The Detroit News spoke to Manager Doneen McDowell, Dham’s plant manager on the changes:

A lot of waste was driven at that process primarily because we didn’t have the floor space to support all the models we’re currently building in-house.”  Ms. McDowell also noted, “We’d see a growth of approximately 50 jobs (next year), and over time that would increase as we grow as a plant.”

GM says the plant upgrade will be completed in August of next year.

Detroit News

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19 responses to "GM Invests $121 Million Into Chevrolet Volt’s Hamtramck Assembly Plant To Bring Down Costs"

  1. GeorgeS says:

    This improvement will facilitate their 4 EV line up: Volt, 200 mile BEV, Voltec MPV and (Spark). Look out Tesla. Mary Barra will Bary you.

    1. SeattleTeslaGuy says:

      @george, So Golaith will slay David? #dreaming

      $121M? This seems like a drop in the bucket, less than 10% of their overall investment.

    2. Brian says:

      I’ll believe the 200 mile BEV and Voltec MPV when I see them. GM has been teasing them for too long for me to take them seriously.

      No, I suspect they’ll drop another couple thousand off the Volt (still would be a great move), but otherwise it will stay the same car until Gen II. The Spark EV will likely stay in CA/OR.

  2. Alok says:

    About Mitsubishi i price:
    The 24 kWh Leaf’s battery costs about $9,000, or $375/kWh.
    If we assume a cost of about $400/kWh for the 16 kWh battery of the Mitsubishi i (I think it’s difficult to estimate it, since they were the first to come to market back in 2009-2010 and they might still have to make use of some “old” equipment/technology for their joint-venture’s battery production, but I think we can think of something like that), it would cost about $6,400. This means the i is still way overpriced, in my view, since the price premium over a similar gas car is now around $12,000 (correct?).
    The Leaf’s price premium over a similar ICE car is, I would say, not more than $10,000 (isn’t it?), but the Leaf’s battery is 50% bigger!
    Anyway, we’ll just have to see whether Mitsubishi can sell them at that price or not. (It’s certainly already quite an interesting offer, considering the subsidies). If not, I think a further reduction might come in about one year’s time. They’ve increased production quite a bit, and they really have to sell them, now, with all the new competition present.
    They started with a huge price, in 2010, when they were enjoying their “monopoly” – a price that had NOTHING TO DO with the cost of the car (just regular business in monopoly regimen: start very high to get the higher end of the market then reduce gradually to get all the rest, thus maximizing income and profit), then they reduced it (by something like $6,000-9,000 or so more than once – which confirmed non-relatedness to cost) as the new products and offers from the competition became available (mainly Leaf introduction, and then Leaf price reduction).
    Well, they’re a company, not a pro-environment no-profit…
    Competition in US is still very little, since there’s no e-Up! or Zoe around, the other small EVs have very limited distribution, and if one needs 4 seats the Smart ED is not a possibility.

    In Europe:
    I think Mitsubishi has still to announce a reduced price for the i-Miev there (here), right?
    The €26,900 for the e-Up! in Germany equate (in reality) to about $26,000 in US.
    (I think most cars, not only EVs, in US, cost a little less in $ than they cost in € in Europe.
    For example, the base Leaf costs €29,690 in Germany).

    The Smart Fortwo ED is selling for €23,680 (battery included).
    (Smart ED and BMW i3 are exceptions to the aforementioned price rule: they are relatively better priced in EU. Much better priced in the case of the i3: just €36,500 in Germany. That’s €3,000 LESS than an Ampera, which is in turn cheaper than the Volt).

    For the i-Miev (it’s still called like that, here) I would expect something around €24,000 – similar to the Fortwo ED.
    If they could only offer it at €23,000 …

    1. Mark C says:

      Wouldn’t the Euro price over there generally include VAT {Value Added Tax for those unfamiliar}? The base price over here typically does not include taxes or destination charges.

      1. Alok says:

        Yes, here in EU prices are inclusive of 20-22% (usually) VAT.
        I thought the MSRP (of course, just recommended…) was inclusive of taxes, in US.
        I’m sure they’re much smaller, there, anyway. Right? Still, they must be something.
        How much are taxes on, say, the $28,800 Leaf?
        (Destination charges are about $850?)

        1. miimura says:

          MSRP of vehicles in the United States does not include any taxes.
          Taxes and fees on vehicle purchases depend on location. In California, you pay a variety of taxes and fees including:
          – Sales Tax of 7.5% – 9.0%. 7.5% is collected by the State, remainder is for additional City and County assessments based on titled owner’s address.
          – Registration and Title Fees, typically $90
          – Vehicle License Fee, a type of personal property tax, approximately 0.65%, due annually but decreasing with estimated vehicle value.
          – Tire disposal fee $8.75
          Those are the “official fees”. The dealer may charge other fees like “Document processing charge” or other things that they can sneak in.

      2. Alok says:

        Notoriously, cars are much more expensive in EU, due in part to this big VAT.
        If you actually convert € in $, the base Leaf price in Germany (€29,690) is a huge $40,770. That’s about 31.5% more respect to $31,000 (my guess of US base Leaf price including taxes and destination charge). So, VAT is not all, apparently.

  3. Nate says:

    If GM has an evil plan to undermine EV’s, they sure do have an expensive way to do it. Wonder where the conspiracy theory people are today?

    1. Sevie says:

      We’re still here! But it’s not necessarily a conspiracy theory–rather, it is a incompetency theory.

      1. Nate says:

        No, there are both. There are much better arguments for the incompetency theory.

        1. Sevie says:

          Then I guess I’m an incompetency theorist. You’re right, where are those conspiracy theorists?!

  4. qwerty says:

    The real story should be “GM is putting a drop in the tiny buckeg of only 9.3% of the 1.3Billion. The rest will be invested into petroleum suckiling products.”

  5. kdawg says:

    “After all, how much could the pack and electric drivetrain actually cost GM ”
    – – – – –

    Isn’t a Volt replacement pack listed for something like $2,200?

    1. Jay Cole says:

      …digging the festive icon change kdawg, (=

      1. kdawg says:

        ‘Tis the season!
        Thanks

    2. ZivBnd says:

      MSRP is $2994 but the “online price” is $2305. Is that the wholesale price? And you have to return your damaged battery to get that price, (I believe, but am not sure of).

      http://www.gmpartsonline.net/parts/2013/Chevrolet/Volt/Base?siteid=215055&vehicleid=407593&section=HYBRID%20COMPONENTS&group=HYBRID%20COMPONENTS&subgroup=BATTERY&component=BATTERY

  6. Don shaw says:

    This investment is in addition to the new factory gm built outside of Baltimore to produce automobile electric motors. It is my understanding that spark motor (which is exported to s Korea for assembly into the car) and a new motor for a ‘secret ‘ project are being made there. Perhaps the whole spark drive train is made there