GM to invest nearly $1.3B in Midwest

GM to invest nearly $1.3B in Midwest
Mon, Dec 16

Workers on the chasis line at Flint Assembly in Flint.Flint — General Motors Co.’s announcement Monday that it will invest nearly $1.3 billion in five Midwest plants — with most money staying in Michigan — shows the company’s commitment and optimism behind its U.S. workforce and continued rebirth, now that it’s out of government ownership.

GM will invest nearly $1.3 billion in five manufacturing sites in Michigan, Ohio and Indiana, with $600 million going to its Flint Assembly Plant, where GM will build a state-of-the art area where vehicles

are painted. The news was welcomed by UAW Local 598 members who cheered loudly when GM North America President Mark Reuss told them, “You’ve earned this.”

“It’s been a lot of hard work and it really is starting to pay off,” Reuss told reporters following the announcement at the Flint plant. “We’re not done. This is a journey.”

The investments — announced Monday also for GM plants in Detroit, Romulus, Toledo and Bedford, Ind. — will create or retain about 1,000 jobs in all. The company declined to say how many jobs will be new.

Nearly all of the investment is staying in Michigan. “About $1.2 billion of that is here in Michigan and we should be so proud of that investment here in our state,” said Gov. Rick Snyder.

GM will spend $121 million at its Detroit-Hamtramck Assembly Plant to build 450,000 square feet of additions for bundling and sequencing of parts for assembly lines. The project could add 210 new jobs at the plant through 2015.

“We’d see a growth of approximately 50 jobs (next year), and over time that would increase as we grow as a plant,” Detroit-Hamtramck Assembly Plant Manager Doneen McDowell said.

GM this year added production of the 2014 Chevrolet

Impala and the 2014 Cadillac ELR to the plant. “We basically started busting at the seams and moving material off site,” McDowell said. With the new space, GM expects to save $5 million a year in shuttling parts to and from Detroit-Hamtramck.

The investments also include $493.4 million at the Romulus Engine Plant, which includes $343.4 million for equipment to produce a 10-speed automatic transmission, and $150 million to increase production capacity of a previously announced V-6 engine. GM previously said that production of the engine would start in late 2015. Reuss told reporters he did not have specifics on the timeline of the transmission or which vehicles it would be used in.

GM’s Toledo Transmission plant will receive $30.6 million to boost capacity of an existing six-speed transmission

and tooling for a variant; and $29.2 million will go to the Bedford Castings facility, including $22.6 million to make components for the 10-speed transmission and $6.6 million to build components for the six-speed.

The investment in Flint will pay for an environmentally friendly area that uses water-based paint and for other upgrades, said Amy Farmer, plant manager. The shop will secure jobs at the plant that employs about 2,950 workers on three shifts, UAW Local 598 President Ray Gorney said.

Since 2009, Reuss said GM has announced investments of more than $10.1 billion in its U.S. manufacturing plants — $2.8 billion this year— creating or retaining more than 26,500 jobs. GM has received significant tax incentives to make new investments at its facilities and will receive tax breaks from Detroit and Flint for the new investments.

GM Chairman and CEO Dan Akerson, who is retiring from the Detroit automaker next month, said in a speech in Washington on Monday that all of GM’s plants are profitable. The company said it needs to invest in its plants and facilities to stay profitable. “We need to think out 10, 20, 30 years to make sure that we’re competitive,” Akerson said.

He said GM has committed $3 billion to help its U.S. dealerships “create the best customer sales and service experience in the industry.”

Akerson said the automaker is committed to keeping enough cash on hand — currently $37 billion — so it can continue investing in facilities even during economic downturns.

UAW Vice President Joe Ashton, who represents GM workers, said in a statement the investments were a “win for American workers.”

Last week, the U.S. Treasury sold its final shares in the Detroit automaker as part of its $49.5 billion bailout, with taxpayers incurring a $10.5 billion loss. Under terms of the bailout, GM is not required to repay taxpayers for the losses.

Reuss said GM will continue to work to win back business it may have lost during the bailout. He said he plans to stay at the company after GM last week named longtime GM employee Mary Barra as its next CEO.

The Detroit automaker had 92,000 U.S. employees at the end of 2008; today it has about 85,500. The company announced plans to close a dozen plants during its 2009 bankruptcy, including six in Michigan; it ultimately reversed its decision to close its Orion Assembly plant in Oakland County.

•GM to invest nearly $1.3B in Midwest

General Motors Co. said Monday it will invest nearly $1.3 billion in five manufacturing sites in Michigan, Ohio and Indiana, including $600 million at its Flint Assembly Plant.

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