General Motors is suspending work on the $370 million factory slated to build engines for the Chevrolet Volt, but says the plug-in hybrid will appear in showrooms by the end of 2010 as promised.

The decision comes as GM frantically slashes costs in a desperate bid to survive while the White House dithers on a bailout. GM and Chrysler have said they could be out of money by the end of the year, but Congress failed to approve $14 billion in short-term loans to the Big Three and the Bush administration appears to be in no hurry to act.

With cash dwindling fast, GM says it has no choice but to postpone work on the the factory in Flint, Michigan, where 300 people would build the 1.4-liter turbocharged engines slated for the Volt hybrid and Chevrolet Cruze compact.

"It's temporarily on hold as we assess our cash situation," GM spokeswoman Sharon Basel told the Detroit Free Press. "I don't think it's any surprise that we're studying and reviewing everything, given the position we're in."

GM is doing everything short of searching for coins under the couch cushions in Rick Wagoner's office, but the Volt program has until now been sacrosanct. Rightfully so, because the range-extended electric car is the centerpiece of GM's campaign to recast itself as a company that builds fuel-efficient vehicles. It's the one thing GM can point to and say "See? We get it. We finally get it." But things have gotten so bad even the Volt is taking a hit.

Nothing is sacred when you're losing $52,000 every minute.

That Apollo-like burn rate has GM idling factories and postponing big-ticket items like the structural steel it needs to build the engine factory it announced in September. "Those are huge cash outlays, and we don't have the cash," Basel told the Associated Press.

The Volt is by far GM's most important project and a significant advancement over conventional hybrids because it relies entirely on electricity for propulsion. The gasoline engine exists only to recharge the lithium ion battery as it approaches depletion. GM says the car will deliver 40 miles of all-electric driving and deliver triple-digit fuel economy.

Basel insists development of the Volt and Cruze will continue and GM still plans to have them in showrooms by the end of 2010 as planned. GM already builds the same engine at a plant in Austria and so could ship them over if need be. "We have lots of options," she says. "The construction of the new plant is not going to interrupt our plans."

There's no word on when construction might resume should Uncle Sam come through with a loan, but GM says there is plenty of time to build the factory, equip it and get it running in time to meet the 2010 production goal. "We can put plants pretty quickly," Basel told the Free Press.

Photo by GM.

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