The Willow Run Transmission plant, set to be closed under General Motors' bankruptcy plan next year, could become a military vehicle rehabilitation facility, an aide to Gov. Jennifer Granholm said Thursday.

Frederick W. Hoffman, Granholm's special advisor for economic development and special projects and a 20-year veteran of Chrysler, said in an interview that a "military vehicle reset" facility is being considered for the site on the eastern edge of Ypsilanti Township. That facility would refurbish vehicles used by the armed forces overseas for domestic military uses.

However, no final decision has been made, he emphasized.

"There's a lot of interest in the plant in the political community," Hoffman said. "One of the things most interesting to folks is military vehicle reset."

Hoffman was in Ann Arbor to participate in a panel discussion on potential reuse of old auto manufacturing plants. The panel was part of the University of Michigan/Urban Land Institute Forum at the Michigan League.

During the panel, Hoffman talked about the various state and local incentives available for redevelopment of old auto sites, and said that "if we have a real deal with (the Willow Run) plant, we would probably doing some unique packaging (of incentives) as well."

He made the comments on the potential military use after the panel discussion.

About 700 people now work at the plant, which consists of 5 million square feet of space on 335 acres. About 14,000 people worked there in the 1970s.

U.S. Rep. John Dingell, D-Dearborn, got involved in an effort to lobby to save the plant when the closure was announced. In an email, Dingell's spokesman Adam Benson didn't address the potential new use direction: "Community partners, business leaders, and elected officials are working hard towards a re-use for Willow Run."

If the military vehicle use comes to fruition, it would not be the first time the plant was used by the military. Before and during World War II, the plant built bomber planes.

But it would keep the historic plant from suffering the fate of what the other panel members said is likely to happen to many other closed auto manufacturing facilities: Razing.

Doug Etkin of Etkin Equities, a company that helped redevelop a GM plant in Pontiac into the Centerpoint development, described the successful transition of the property to hotels, retail and restaurant. But the remaining plant there is also set to close in 2010, and Etkin said demolition is an option.

"They would like to repurpose it. If they can't, and the cost of carrying it becomes prohibitive, they need to tear it down," he said.

In response to a question from an audience member, panelist Michael Deighan of Alix Partners said, "These are old, big steel and concrete boxes. There's not a whole lot you can do to restore them to better use."

"if they cant be reused, they need to be torn down as fast as they can so the land can be reused," he added. Deighan also is working for GM to help dispose of excess property.

The panel recounted some success stories, such as a mall redevelopment in California, alternative energy companies in the process of taking over a plant in Wixom, and movie studios going into Pontiac.

Panelist Jay Gardner of Ford Land, Ford Motor Co.'s real estate company, said the goal is always to find another use for a defunct plant.

"What we try to do is actually leave them up and find uses for them," he said. "But at some point, you reach a point where you can't leave it up forever because holding costs are substantial."

Annarbor.com business director Paula Gardner contributed to this report. Freelance reporter Dan Meisler can be reached at danmeisler@gmail.com.