Union says new SUV from GM will use engines made in China

Carmaker silent on plans for its Equinox model

October 29, 2002|By BLOOMBERG NEWS

DETROIT - General Motors Corp. will put a six-cylinder engine from China in a planned Chevrolet sport utility vehicle, the automaker's first use of a Chinese-made engine in North America, a Canadian union leader said yesterday.

The world's largest automaker will ship the engines from one of its joint ventures in China to Ingersoll, Ontario, where General Motors will build the Equinox SUV starting in 2004, said Canadian Auto Workers President Buzz Hargrove. General Motors spokeswoman Debbie Frakes declined to comment on engine plans for the Equinox.

The Detroit-based company told the union, which reached a new three-year contract with General Motors last month, that it doesn't have the capacity to build the engine in Canada, Hargrove said. "We didn't see much that we could do to change the decision. It's an engine they are already building in China."

China's consumers aren't yet buying enough vehicles to keep General Motors' plants in that country at full capacity, said David Cole, executive director of the Ann Arbor, Mich.-based Center for Automotive Research. "The trick with an investment is to use it a lot," so the automaker is turning to exports.

The company's joint venture with Shanghai Automotive Industry Corp. builds engines as well as cars at a $1.5 billion factory in China. General Motors, which has three other joint ventures in China, has said it might export engines from Shanghai to other Asian markets.

General Motors has said it expects industrywide car and truck sales in China to rise 42 percent to 3.4 million vehicles this year from 2001, and predicts China will be the third-largest market for automobiles by 2008 behind the United States and Japan.

The automaker has said it will build at least 100,000 Equinox models a year at the Ingersoll plant, which is half-owned by Suzuki Motor Corp. General Motors plans to unveil the Equinox at the Detroit auto show in January. Chevrolet spokesman Tom Wilkinson said the SUV's engine will be part of a new family of six-cylinder engines designed by General Motors.

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