GM to invest $1.3B to upgrade 5 U.S. sites

Bloomberg NewsDecember 16, 2013 

General Motors Announcement

Ryan Buchalski, UAW 598 vice president, second from left, cheers and celebrates alongside nearly 100 union employees Monday at the Flint Assembly Plant in Flint, Mich., The investment plans include $600 million for an assembly plant in Flint, Mich., where GM builds heavy-duty versions of the Chevrolet and GMC full-size pickups, which are being redesigned for next year.


— General Motors, pushing to refresh most of its U.S. lineup, said it plans to spend $1.3 billion to upgrade five U.S factories on top of the $1.5 billion already announced this year.

The new plan follows last week’s move by the U.S. Treasury to sell off its remaining shares in GM, freeing the Detroit-based company from U.S. government ownership. Chief Executive Officer Dan Akerson also said he will retire next month, naming Mary Barra, the company’s top product-development officer, to succeed him.

GM brought out 18 new or revamped models in the U.S. this year and plans 14 more next year as the automaker improves its lineup from one of the industry’s oldest into one the newest. The investments disclosed Monday will create or retain about 1,000 jobs, making vehicles or components, the company said.

“Today’s announced plant upgrades continue the momentum of a resurgent auto industry,” Mark Reuss, president of GM’s North America operations, said in a statement. “More importantly, these investments add up to higher quality and more fuel- efficient vehicles for our customers.”

The investments will help support the production of a new V-6 engine and new 10-speed transmission, in Romulus, Mich., GM said in the statement. The investment plans include $600 million for an assembly plant in Flint, Mich., where GM builds heavy-duty versions of the Chevrolet and GMC full-size pickups, which are being redesigned for next year. The investment includes a new paint shop, the automaker said in an emailed statement.

The automaker’s powertrain factory in Romulus will get $493.4 million, its Detroit-Hamtramck assembly plant will receive $121 million for logistics, a transmission factory in Toledo will get $30.6 million to increase capacity of six-speed transmissions, and a Bedford, Indiana, casting facility will get $29.2 million largely to produce components for the 10-speed transmission.

GM earlier this year announced plans to invest $16 billion at U.S. factories and facilities and $11 billion in China through 2016. The spending plans are part of Akerson’s push to boost North American operating margins to match those of Ford Motor Co. and almost double China sales by mid-decade.

Reuss, who will take over Barra’s product-development job next month, said in January 2013 that the company planned to invest $1.5 billion in factories and facilities in North America this year. Monday’s announcement brings GM’s total stated investments in U.S. facilities since 2009 to more than $10 billion, creating or retaining 26,500 jobs.

GM will continue to invest about its current rate, Akerson said in Washington.

Ford said last week that it plans to create 11,000 jobs in the U.S. and Asia in 2014. More than half of the 5,000 U.S. hires will be salaried technical professionals to support the Dearborn, Mich.-based company’s plan to introduce 16 new vehicles in North America next year.

The end of U.S. ownership in the automaker helps put the company’s 2009 bankruptcy restructuring in the past, Akerson said.

“The end of the ‘Government Motors’ era has cleared the runway for the team to soar,” Akerson said Monday at the National Press Club in Washington D.C., according to prepared remarks.

Asked by reporters whether GM should pay the government to make up for the Treasury’s loss, Akerson said the automaker had met its obligations and helped the broader economy. Paying more than that would lead to shareholder lawsuits that would be hard to defend against, he said.

“We paid back all that we owed,” Akerson said. “I have the benefit of not having to explain the bankruptcy: I wasn’t there when it happened. It was structured, that was the deal that was structured.”

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