Volt Could Be a Shot in the Arm for Detroit

Posted by Lawrence Ulrich on Monday, December 14, 2009 9:34 AM

Detroit’s woes have been brutally documented: bankruptcy and bailout for GM and Chrysler, 17 percent city unemployment, a ruinous real-estate market -- and in the latest gut-punch, the Tigers choking away their shot at the MLB playoffs.

Any shred of good news is welcome in my former hometown. Which is why GM’s decision to build two critical models in Detroit -- the Chevrolet Volt plug-in hybrid and the strong-selling Chevy Malibu sedan -- is a plus for the city and state.

This isn’t charity on GM’s part: Michigan pulled out all the financial stops to get the Volt. Gov. Jennifer Granholm backed $945 million in tax credits and grants to spark development of alternative-fuel cars and technology in Michigan. The state reeled in an additional $1.35 billion in Department of Energy grants. After all that, the Volt is scheduled to begin production late next year at the Detroit-Hamtramck plant, just a few miles from where I used to live in downtown Detroit. (The Volt’s sister vehicle, called the Opel Ampera and destined for sale in Europe, will also be built at Hamtramck.) Despite modest production volumes, the Volt could be a make-or-break vehicle as GM seeks to revamp its business and image. GM’s total investment in Michigan for the Volt will now rise to $700 million.

Additionally, the Detroit News quoted a United Auto Workers official in Detroit who said GM will switch production of the 2012 Malibu from Fairfax, Kansas, to Detroit, though GM manufacturing spokesman Chris Lee declined to confirm the report.

So, once again, the city is looking to Hamtramck to help spark a rebirth. I still remember the controversy the plant stoked before it opened in 1985. GM and the city had the plant’s 465 acres seized under eminent domain, displacing 4,200 residents and obliterating what was known to the locals as "Poletown" (thanks to its overwhelmingly large Polish demographic). Public opinion was divided: Ralph Nader got into the act, opposing the plant and drawing attention to protesters; other residents supported the plant for the 6,000 jobs it would bring. Mayor Coleman Young savaged Nader as a Washington carpetbagger with “a psychotic hatred for GM.” A 29-day sit-in at the Immaculate Conception church ended in July 1981 when police evicted and arrested protesters, and the wrecking ball soon followed.

Despite all that, the plant never did much to boost Detroit’s fortunes. Sales of Cadillacs built at Poletown plunged through the '80s and '90s. Only about 1,250 hourly and salaried workers remain at Hamtramck today, building the slow-selling Cadillac DTS and Buick Lucerne sedans.

I’ve long argued that if Detroit is to stage a comeback, it won’t be exclusively because of cars. Even the Volt and Malibu won’t bring back the good old days: GM today employs 21,000 people in Michigan -- fewer than one-tenth of the 215,000 workers of 30 years ago. GM’s Lee also said the Volt won’t initially require new hires at the plant. But the car is expected to bring spinoff employment, including in GM’s upcoming lithium-ion battery assembly facility near Detroit. A successful Volt could lay the groundwork for GM and Michigan’s bid to lure well-paying jobs in electric cars and technology. For a city that’s been mired in a vicious boom-and-bust loop for decades, every little bit helps.