WASHINGTON/DETROIT — General Motors Co Monday pulled the plug on the Chevrolet Volt hybrid and the Detroit-Hamtramck Assembly plant that builds it, both examples of a costly gamble that is not paying off.
GM’s widely touted factory of the future, forced on a town desperate for jobs and hailed decades later by former President Barack Obama, is set to wind down over the next few years, leaving beleaguered Hamtramck wondering what happened.
Detroit Mayor Mike Duggan said at a news conference Monday that he told GM chief executive Mary Barra Monday that “we moved thousands of people out of that neighborhood ... to create that assembly plant, and I felt that the city of Detroit deserved more consideration.”
The Detroit-Hamtramck plant stands on 465 acres of land that was once a neighborhood known as “Poletown.”
In 1981, the Michigan Supreme Court approved a decision to allow Detroit to tear down up to 1,500 homes, more than 140 businesses, a hospital and six churches to build the $500 million plant. The Detroit News reported 4,200 people lost their homes as a result.
GM convinced officials in the cities of Detroit and Hamtramck, the state of Michigan — and ultimately the state’s highest court — to use eminent domain, a controversial process in which government seizes private land.
Karen Majewski, the mayor of Hamtramck, told Reuters that the GM plant is one of the largest contributors to local property taxes. Empty, she worried the factory will discourage other investments.
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“They destroyed homes and churches and local businesses, all to build that plant,” Majewski said. “Now that the plant is going to close, people will wonder why that neighborhood had to be sacrificed in the first place.”
In the years after the federal bailout of GM, gas prices fell and the Volt did not hit GM’s ambitious sales targets.
U.S. Volt sales are down 14 percent for the year through October to just 14,897 cars — about one-third the number of Chevrolet Silverado pickups GM sells in a month. Since 2010, GM has sold about 150,000 Volts, which is about half the capacity of a typical car plant running at full speed.
GM on Monday did not definitively say the Hamtramck plant will be closed but instead called the factory “unallocated,” meaning it has no products to build after 2019.
It is possible GM could reach an agreement with the local union to put a vehicle in the plant in talks next year.