Nathan Bomey

Detroit Free Press

DETROIT — General Motors is investing a total of $449 million at a Michigan assembly plant and a battery factory for the next generations of the Chevrolet Volt that so far has not met sales expectations.

GM said the expansion will allow it to manufacture two other vehicles that the automaker has not yet identified at the Detroit-Hamtramck plant.

Most of the money — $384 million — will go to Detroit-Hamtramck, where GM expects to launch a redesigned Volt in 2016. A source familiar with the company's plans told the Detroit Free Press the investment will enable the plant to add about 1,400 jobs and a second shift.

So far, Volt has been a disappointment in Chevy showrooms. Through March sales are only 3,600, or 15% fewer than a year earlier. Sales last year fell 1.6% to just more than 23,000 despite GM cutting the price from about $40,000 to $35,000.

Gasoline prices have remained relatively stable since the Volt's debut in 2010, making the car less attractive to shoppers.

Workers at Detroit-Hamtramck also build the Cadillac ELR, an upscale version of the Volt's extended-range plug-in powertrain, which starts at $75,000, minus a $7,500 federal tax credit. Cadillac dealers sold 180 ELRs this year through March.

Gerald Johnson, GM vice president of North American manufacturing, said the $65 million to be spent at a Brownstown Township battery factory would go to the production of "other future battery systems."

GM said last year it will improve the electric-only range of the car by at least 20% in the next Volt, which in its current state can travel about 38 miles on battery power alone, before a gasoline engine engages.

"Today's news will ensure that the next generation Chevy Volt continues and solidifies that position of leadership," Johnson said at an Automotive Press Association luncheon in Detroit. "We want our customers to benefit from our investments in technology and to keep coming back to General Motors for their purchases."

While all automakers are trying to reduce the cost of making batteries, last year's $5,000 price cut on the Volt did not stimulate sales.

"They made a huge investment in the first Volt, and it came out at a very difficult time for the company," said AutoPacific analyst Dave Sullivan. "Traction has not been what GM expected it to be. I think the Volt was a long-term play instead of a knee-jerk reaction to vehicles like the (Toyota) Prius."

Perhaps more significant from a job creation perspective is GM's decision to allocate two new, unidentified vehicles to the Detroit-Hamtramck plant, solidifying the factory's future less than two years ahead of contract talks with the UAW.

GM also assembles the Chevrolet Malibu and Impala and Opel Ampera, the European version of the Volt, at Detroit-Hamtramck. GM has invested more than $1 billion in the plant since its Chapter 11 bankruptcy in 2009.

Detroit Mayor Mike Duggan said GM has not yet asked the city for any tax incentives to support the plant's expansion.

"When you see GM putting the investment here in future products, it says they have confidence in the men and women building the cars in Detroit and they have confidence in this community," said Duggan.

GM employs 1,629 workers at the 3.6 million-square-foot Detroit-Hamtramck plant, including 1,436 represented by UAW Local 22. The automaker employs 100 workers represented by UAW Local 174 in the Brownstown facility.

Sullivan said it's crucial for GM to achieve large battery cost reductions because a $7,500 federal tax credit for electric vehicles could eventually expire, giving consumers less incentive to try a new technology.

Lowering battery costs may require breakthroughs at battery suppliers, which make the battery cells that GM workers assemble into battery packs.