The new factory off Interstate 75 in Brownstown Township, about 15 miles south of Detroit, will take batteries made by LG Chem in South Korea and assemble them into packs that will power the new Chevrolet Volt, said one of the people. Both requested anonymity because GM hasn't officially announced the plant site.
The Volt, due in showrooms by November of 2010, will be built at an existing GM factory that straddles the border between Detroit and the tiny enclave of Hamtramck. That plant now makes the slow-selling Buick Lucerne and Cadillac DTS full-size sedans.
GM says the Volt will be able to travel 40 miles on a charge from a home electrical outlet, with a small gasoline engine to generate power after that.
The Volt is important to GM on many levels. It puts the automaker in front of its chief rival, Toyota Motor Corp., in producing electric vehicles, giving GM a public relations boost. Currently Toyota leads in gas-electric hybrid sales with its Prius model.
Although GM doesn't expect to make much money on the Volt initially, it has plans to reduce costs and the price in future generations and spread the Volt powertrain to other vehicles in its lineup. The car also will help GM meet stricter federal fuel economy requirements.
Both people briefed on the decision said GM will invest $43 million in an existing building. The factory will assemble the battery packs using battery cells shipped to the U.S. from Korea. GM officials have said that the Detroit area was the front-runner for the battery pack factory because of its proximity to the Volt assembly plant.
The battery pack factory will be highly automated and won't employ a huge number of people, but it will be able to weld the battery packs together quickly, GM officials have said.
Even 100 jobs, though, is good news for Michigan, which led the nation with a 15.2 percent unemployment rate in June, the highest monthly mark since the spring of 1983. Michigan has had the nation's highest annual average unemployment rate since 2006.
Joe DiSanto, manager of the Economic and Community Development Department for Brownstown Township, said he didn't know whether a formal selection had been made. But he said he has had several meetings with GM on the possibility.
A 12-year, 50-percent personal property tax abatement for GM was approved by the township in March as part of the effort to attract automaker, although final documents haven't been sent to the state for approval, DiSanto said.
"We're supportive of the project," DiSanto said.
Township Trustee Michael D. Eberth said GM looked at several sites including an industrial park and was looking for an existing building, rather than a site for a new facility.
"It was clear in my opinion that GM was dedicated to Michigan, although they may have had other sites in the country in mind," Eberth said.
LG Chem CEO Peter Kim has said the company may eventually build cells in Michigan, and it anticipates that its U.S. subsidiary, Compact Power Inc., will add to its 100-person work force in nearby Troy.
The Volt is expected to cost $35,000 to $40,000. GM already is testing the vehicles at its technical center in Warren, Mich.