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GM Accelerates China Plans With US Bailout Stalled


General Motors is still awaiting an auto industry bailout in the United States, but that is not stopping the corporation from moving forward with plans to expand in China.

The ailing U.S. automaker opened a new plant Wednesday in northeast China, part of a venture with Chinese carmaker SAIC Motor. GM says the plant is part of the company's ongoing pledge to grow its operations in China.

The plant is GM's second in the city of Shenyang, and is expected to produce the new, fuel efficient Chevrolet Cruze starting in 2009. But there still are questions about who will make the car's engine.

GM originally planned to build the engine at a new, $350 million factory in the northern U.S. state of Michigan, but a company spokeswoman said construction of the factory is on hold. She blamed a lack of available cash, but said GM plans to build the new factory eventually.

The facility also was slated to build engines for GM's much anticipated electric car, the Chevrolet Volt.

U.S. President George Bush said Tuesday his administration is trying to craft a plan to aid America's hurting automakers in an "expeditious way." He said officials are looking at all options, although a spokeswoman said no decision is imminent.

Both General Motors and Chrysler say they could collapse within weeks without government aid.

Earlier, Japanese automaker Honda slashed its annual profit forecast for a third time, a further sign of the pressure on the auto industry from the global recession. And rival automaker Nissan says it will reduce domestic production by another 78,000 vehicles at several car and engine plants. About 500 contract workers will be laid off due to the production cuts.

Some information for this report was provided by AFP, AP and Reuters.

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