General Motors has scrapped plans for a new engine plant that would have produced 1.4-litre, four-cylinder engines for use in the Chevrolet Volt Hybrid and Cruze vehicles.
Those engines will now be sourced from overseas until an existing plant can be modified to produce the smaller engines.
GM made the decision as part of its battle to reduce costs in order to qualify for US federal loans.
The change of plans will not affect the launch of the Volt and Cruze with GM planning to import the first engines required for these models. The plant will then begin producing these engines in December 2010.
It will cost US$250-million to re-tool the plant from its previous role as engine plant for the discontinued Chevrolet TrailBlazer and GMC Envoy, which utilised a 4.2-litre, in-line, six-cylinder engine.
The Cruze is due in showrooms in early 2010, and the Volt is scheduled to follow in November.