GM’s $5.4B investment includes upgrades to 3 Michigan plants – Detroit Free Press
General Motors will invest $5.4 billion in its U.S. facilities over the next three years, including $783.5 million to upgrade three Michigan plants, the automaker said today.
The largest portion, $520 million, will go for new tooling and equipment at the Delta Township assembly plant near Lansing, where workers produce the Chevrolet Traverse, Buick Enclave and GMC Acadia.
The company’s Pontiac Metal Center, which stamps body panels for most Chevrolet, GMC, Buick and Cadillac models, will receive $124 million in new equipment. The Pontiac plant was nearly closed as part of GM’s 2009 bankruptcy, but it has bounced back and employs about 490 hourly and salaried workers. The new investment will create 15 new jobs, said GM spokeswoman Katie McBride.
GM will spend $139.5 million for a new body shop and to upgrade stamping operations at a plant in Warren that builds prototype bodies of future models.
“These investments are evidence of a company on the move, strategically investing in people, tools and equipment to product cars, trucks and crossovers that are built to win in the marketplace,” said Alan Batey, president of GM North America.
The Michigan investments, announced in Pontiac, are part of a $5.4-billion capital spending plan throughout the U.S. They come after a company-commissioned report from the Center for Automotive Research found GM has spent $11.3 billion upgrading its 40 U.S. manufacturing plants since emerging from bankruptcy in July 2009.
That same report found that while GM’s total U.S. workforce, both salaried and hourly, has risen to 78,000 from about 74,000 in 2010, it remains well below the 91,655 at the end of 2008.
The $5.4 billion to be spent across all GM’s U.S. plants will add 650 jobs and preserve 15,300 existing jobs.
GM is touting the new investments months before negotiations begin with the UAW on a new labor agreement. The current contract expires in September. Management is expected to outline other investments as early as next week.
“I don’t think this investment was made because of bargaining. It was made because we’ve been working together jointly,” said Cindy Estrada, the UAW vice president for GM. “Workers on the shop floor have shown that we’re focused and building a great product.”
The investments as a vote of confidence in GM’s future and its workers, but the automaker is also investing about $3.6 billion to upgrade and expand its plants in Mexico.
“We’re definitely concerned about Mexico,” Estrada said. “We’re concerned that Mexico’s wages are so low and whether or not they have real democratic unions.”
In February, a group of four hedge funds, led by former Obama administration auto task force adviser Harry Wilson, pushed GM management to repurchase $8 billion of its own shares. The activist investors argued that GM was holding more cash than it needed and that was holding down the stock price. The group also wanted Wilson to be added to GM’s board of directors.
GM responded by agreeing to buy back $5 billion of its own shares, rejected Wilson’s bid for a board seat and outlined to a group of large investors a plan for upgrading plant and equipment and how much it would cost.
Thursday’s announcement reflects a portion of that plan.
“The common thread among our investments is the focus on product improvements that benefit customers,” said Cathy Clegg, vice president of GM North America manufacturing.
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