GM to build small Cadillac in Lansing, invest $190M

October 27, 2010

GM to build small Cadillac in Lansing, invest $190M

Automaker’s latest project will bring 600 jobs

The Detroit News

General Motors Co. plans to announce Thursday that it will build a compact-sized Cadillac at its Grand River Assembly plant in Lansing, a $190 million investment that will put 600 people to work, officials briefed on the announcement said.

GM CEO Daniel Akerson will make the announcement at the plant, joined by Michigan Gov. Jennifer Granholm, United Auto Workers President Bob King and three Michigan members of Congress.

The automaker is expected to call its new Cadillac the ATS. It will be smaller than the Cadillac CTS and similar in size to Cadillac BTS/BLS sold in Europe, according to a source familiar with the project.

GM spokeswoman Kimberly Carpenter declined comment Tuesday night.

The Cadillac announcement is the latest in a series of new products and investments by the Detroit automaker, which emerged from bankruptcy last year and is expected to launch its initial public stock offering in mid-November.

With the Grand River investment, GM will have pumped more than $3 billion in 20 U.S. plants, creating or preserving about 7,350 jobs since emerging from bankruptcy 14 months ago.

"This is a huge boost to our manufacturing sector, that they have chosen to build a new small Cadillac here, and it’s clearly great for Lansing. It’s great for General Motors and it’s great for Michigan," U.S. Rep. Mike Rogers, R-Brighton, told The Detroit News.

Akerson, who became CEO Sept. 1, will get a 45-minute tour of the Grand River plant before Thursday’s announcement. He will be accompanied by Diana Tremblay, who is GM’s vice president for manufacturing and labor relations.

The $707 million, 2.5 million-square-foot Grand River factory, on 111 acres, was built in 2001 and employs 1,133 workers who already build Cadillacs, including the CTS, CTS-V, SRX and CTS Wagon. It started production on Cadillac CTS Coupe and CTS Coupe V in June.

It was unclear Tuesday whether GM and the UAW are seeking a labor agreement for the Grand River plant similar to one at the Orion Township assembly plant.

Under that pact, specific to Orion Assembly, about 60 percent of hourly workers recalled to the idled plant to build two new small cars will get the traditional tier-one wage of $28 an hour with benefits. The remaining 40 percent will get a second-tier wage of about $14 an hour; the split will be based on seniority.

The Orion plant deal was struck to help GM make a profit on small-car production, and was key to its decision to add the Verano to the Buick lineup. GM plans to recall 1,550 salaried and hourly workers to the Orion plant, which was closed for retooling in November.

A replacement for the Chevrolet Aveo subcompact also starts production next year at Orion Assembly.

GM didn’t have great success with previous small Cadillacs; neither the Cimarron of the early 1980s nor the Catera of the late 1990s was well received.

The Grand River plant isn’t the only Lansing-area GM facility getting a boost. GM announced plans last week for $37 million in upgrades at its Delta Township Assembly plant.

GM is expected to announce next week what some analysts believe will be significant third quarter profits. GM reported net profits of $2.2 billion in the first half of the year.

Also in November, top GM execs are to mount a global roadshow to convince big investors to buy the company’s stock.

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