Given the money-consuming challenges, how do you build a subcompact, economical, yet high-performance and feature-packed car in America? If you are General Motors, you do it in a subcompact, economical, yet high-performance and feature-packed factory, of course.

More to the point, GM has decided to prove its Lake Orion, Mich. assembly plant can profitably build its 2012 Sonic subcompact in the U.S. As such, it will be the only subcompact currently built in this country, as no other automaker has shown it can and make (enough of) a buck.

It does not have electric propulsion, but we agreed with a GM-Volt reader who suggested the innovation shown by the recovering American car maker is enough to merit attention by anyone interested in GM's progress and economical vehicles.

2012 Sonic hatchback

The Sonic will come with one of two Cruze engines stuffed into a platform about 500 pounds lighter, loosely based on the Opel Corsa, and delivering over 40 mpg.

Trimmer and smarter looking than the outgoing Aveo, the "world" car employs strategically placed design cues from motorcycles, and when available this fall, will start at $14,495 including a $760 destination charge.

Top-down cost cuts

In order to make the gambit feasible, the entire assembly plant had to be streamlined – with the goal being to not draw down quality in the process.

To mitigate what is normally the largest profit sapper, the factory uses fewer than the usual number of employees. And of these, the United Auto Workers union agreed to an out-sized proportion of 40 percent of "tier 2" entry-level workers earning $14.50 per hour, with other "tier 1" workers making about $28 per hour.

2012 Sonic Sedan.

This 50-percent pay slash is at least closer to the under $10 per hour a Mexican autoworker might make, far less than up-to $60 per hour a full-wage U.S. union member might collect, but the decision was not without controversy .

Because the U.A.W.’s President Bob King saw the value of GM’s efficient subcompact, he agreed to compromises that allowed the first car of its class to be built by GM in the U.S. since the Chevette about 40 years ago, unless you count also a brief period GM built re-badged Toyota Corollas as GEO Prizms.

“We are committed to the success of the company,” King said to the New York Times. “We had to talk about a business model that makes sense.”

To further whittle costs, the Lake Orion plant compresses floor space. Just as wages were halved, so was the size of the the assembly line. In another era the operation might have sprawled over a million square feet, but Lake Orion's was minimized onto just 500,000 square feet.

And on this remaining space are clustered robots, such as those used for welding, to create a model of production efficiency, requiring less energy to run.

According to GM Spokesperson Christi Vazquez, there were several initiatives at the plant to improve efficiency and environmental impact, including using nearby landfill-sourced methane gas to provide 40 percent of the plant's energy, and lighting system upgrades which save $430,000 per year while reducing the plant's carbon footprint. Additionally, GM moved some suppliers into the plant which was enabled by shrinking the assembly footprint by 50 percent.

Hatchback interior.

To offset the low profits subcompacts typically make, Lake Orion will also build the higher-profit Buick Verano .

GM said these plans were put in motion in 2008, prior to the federal bailout, and settled between a bankrupt GM and union officials who made concessions needed to let it work.

“We wanted to prove we could do it,” said Diana D. Tremblay, GM’s head of global manufacturing.

Sedan interior. Note motorcycle-inspired tach and speedo.

Regarding the low wage deal, the Times reported the U.A.W. tried to persuade Ford to build its Fiesta in the U.S., but Ford went south to Mexico instead, paying workers there under $10 per hour.

Similarly, Honda does not build its Fit in the U.S., but imports it from other assembly plants, including those in China and Brazil.

2012 Sonic

Chevrolet said it will not have EPA economy numbers for its new Sonic , until closer to its fall release, but it is a car that makes sense.

The company says it found elegant solutions to cut production costs, including use of an ultra-thing rust proofing film under the paint.

"The rustproofing still meets or exceeds all of GM's paint and rustproofing standards," Vazquez said. "A new process allows us to reduce the amount without reducing the rustproofing performance."

Further, both the Sonic and Verano will use a new eco paint that eliminates the need for a primer oven and increases quality and appearance due to waterborne base coats.

But Vazquez was reluctant to elaborate on more Sonic cost saving measures.

"For competitive reasons, we can't outline any other changes," she said while changing the topic toward the opposite direction. "We actually made several changes to the vehicle, such as offering alloy wheels as standard that were counter to cost-cutting measures to make sure our customers got a better experience."

Note motorcycle-inspired tail lights and discrete rear passenger door handle in the black section behind the window.

Similarly, Vazquez noted that the Sonic is made with over 60-percent high-strength steel which, while more expensive, improves performance characteristics, including crash performance – a concern for smaller cars.

And more good news for buyers is that at eight inches shorter than GM’s next largest car, and despite being a relatively portly 2,800 pounds – a good 300 pounds more than other cars in its segment – the Sonic will not be boring.

Two engines lifted straight out of the heavier Cruze offset its mass, actually offering superior power-to-weight to the Cruze, let alone other subcompacts. Included will be three transmission options – a five-speed manual and six-speed automatic for the 1.8 liter, and a six-speed manual for the $700 extra 1.4-liter turbo.

Chevrolet rates the Flint, Michigan-built Ecotec 1.4-liter turbo at 138 horsepower – 18 more than Ford’s Fiesta – and says its 148 pound-feet of torque arrives at 1,850 rpm and extends to 4,900 rpm.

Engine highlights include:
• Low-mass hollow-frame cast iron block
• Dual overhead camshafts with variable valve timing
• Chain-driven cams
• Roller-finger camshaft followers
• Piston-cooling oil jets and integrated oil cooler
• Variable-flow oil pump
• Electronically controlled thermostat.

Smaller and less money than the Cruze, but with same engine.

Also available is a Korean-made, naturally aspirated Ecotec 1.8 liter with the same peak horsepower, but offering less grunt and requiring more revs.

Chevrolet estimates 138 horsepower at 6,300 rpm, and 125 pound-feet of torque at 3,800 rpm. A two-stage variable intake manifold is said to enable about 90 percent of peak torque from 2,400 rpm to 6,500 rpm.

Both cars ride on MacPherson struts, wheelbase and track are both about 1.5 inches broader than a Ford Fiesta's, and with optional 17-inch wheels and sport tires available, Chevrolet promises “athletic” performance.

The Sonic Z-Spec accessory portfolio includes Color Out accent packages with contrasting-color exterior parts and graphics that express the car's performance characteristics. .

“The all-new Chevrolet Sonic blends the practicality of a small car with the passion for driving that Chevrolet vehicles like the Corvette are known for,” said Chris Perry, vice president of Chevrolet marketing. “Its combination of great design, fun driving experience and the latest connectivity features create a serious competitor with a fun spirit.”

Other Sonic highlights include:
• Ride and handling tuned by Chevy Corvette engineers; standard electronic power steering and StabiliTrak electronic stability control with rollover sensing
• Sedan model offers segment-best trunk capacity that is greater than most compact cars; hatchback and sedan offer better rear-seat roominess than Ford Fiesta. With a rear seat that folds nearly flat, the Sonic hatchback has greater cargo capacity than Fiesta
• Connectivity includes OnStar with six months of Turn-by-Turn navigation. Available features include XM Satellite Radio, USB and Bluetooth functionality and MyChevrolet mobile application with OnStar MyLink vehicle connectivity
• Remote start, heated front seats and sunroof, all rarities in the segment
• Comprehensive safety features include 10 standard air bags, antilock brakes, electronic brake force distribution, brake assist and OnStar with Automatic Crash Response.

“Chevrolet is the only company building a small car in the United States,” said Perry. “We believe the Sonic will bring substance to the segment, with progressive styling, performance and value that will change perceptions of what a small car can be in America.”

Arriving this fall.

As for these assertions, Automobile magazine recently drove a pre-production 1.4-liter turbo Sonic on an autocross course at Indianapolis, along with a Ford Fiesta and Honda Fit for comparison.

Chevrolet attributed the Sonic's extra weight to its bigger footprint and 10 airbags, among other things. But once its turbo spooled up, go-power was superior, as was turn-in response and steering precision compared to the Ford and Honda. Automobile gave higher marks for the Fiesta’s interior materials, and the Honda’s gearbox, however.

The Sonic’s tilt/telescopic steering wheel, good panel fit, and “adult-friendly back row” also impressed, and while reserving judgment for the production car, Automobile said the new Sonic is proof that a formidable and fun-to-drive subcompact can be built domestically.

Vazquez said GM has not yet released volume projections for the Sonic. A fully loaded model could price out to "slightly under $20,000," and aside from the Honda Fit and Ford Fiesta , other competitors GM is mindful of include the Toyota Yaris and Hyundai Accent .

Chevrolet , New York Times , Automobile