GM could close Detroit-Hamtramck plant that relocated thousands

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President Barack Obama drives a Volt from the assembly line at GM's Detroit-Hamtramck plant on July 30, 2010 during one of the many journeys to American car factories. Photo credit: REUTERS

WASHINGTON / DETROIT – General Motors on Monday pulled the Chevrolet Volt hybrid plug and possibly the Detroit-Hamtramck Assembly plant that built it, both examples of an expensive gamble that does not pay off.

GM's critically acclaimed factory of the future, forced by a city desperate for jobs and acclaimed decades later by former President Barack Obama, will cool off in the coming years, making besieged Hamtramck wondering what has happened happened.

Detroit mayor Mike Duggan said Monday at a press conference against GM chief Mary Barra that "we have moved thousands of people from that neighborhood … to create that assembly facility and I felt that the city of Detroit deserved more attention."

The Detroit-Hamtramck plant is located on 465 hectares of land that was once a neighborhood known as & # 39; Poletown & # 39 ;.

In 1981, the Michigan Supreme Court approved a decision allowing Detroit to demolish up to 1,500 homes, more than 140 businesses, a hospital, and six churches to build the $ 500 million facility. The Detroit News reported that 4,200 people lost their home as a result.

GM convinced officials in the cities of Detroit and Hamtramck, the state of Michigan – and ultimately the highest court in the state – to use an eminent domain, a controversial process in which the government seizes private land.

Karen Majewski, the Mayor of Hamtramck, told Reuters that the GM plant is one of the biggest contributors to local property taxes. Empty, she was afraid that the factory would discourage other investments.

"They have destroyed homes and churches and local businesses, all to build that factory," Majewski said. "Now that the factory is closing, people will wonder why that neighborhood should be sacrificed in the first place."

Economic development gamble

For years after the opening, the Detroit-Hamtramck plant struggled and built one generation of slow sales models after another.

The precedent of the project has also been dealt a blow. In 2004, the Michigan Supreme Court overturned its previous decision to take up living space and called it a radical departure from fundamental constitutional principles and more than a century of the jurisprudence of the eminent domain & # 39; The court said it acted to "protect the property rights of the people and to preserve the legitimacy of the judiciary as the (non-creator of) the constitution."

GM tried to revitalize the Hamtramck plant in 2008 when it approached the financial collapse by having the Chevrolet Volt plug-in hybrid car built. GM praised the Volt as a symbol of its technological promise and a reason for the government to step in and save the company.

In 2010, US President Barack Obama visited the factory and even drove a Volt for about 10 meters. Some Republicans and conservative critics released the Volt in the lap of the Obama-car & # 39 ;.

In the years after GM's federal rescue operation, gas prices fell back and the Volt did not reach GM's ambitious sales targets. American volt sales have dropped by 14 percent in the year to October to just 14,897 cars – about a third of the number of Chevrolet Silverado pickups that GM sells in a month. Since 2010, GM has sold around 150,000 volts – about half the capacity of a typical car factory running at full speed.

GM did not say definitively on Monday that the Hamtramck plant will be closed, but instead has named the factory "unassigned", which means that there are no products that can be built after 2019.

It is possible that GM can reach an agreement with the local trade union to bring a vehicle into the factory next year.