GM to invest $5.4B in U.S., Michigan plants

Melissa Burden
The Detroit News
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Pontiac — General Motors Co. on Thursday said it will create 650 new jobs as it invests $5.4 billion into U.S. plants through 2017, including a total of $783.5 million at three Michigan sites.

GM and UAW executives announced the investments at GM's Pontiac Metal Center, which is getting $124 million in upgrades, including a new press. It will add 15 jobs with the investment. The plant was among those that faced closure around GM's bankruptcy but today has about 490 employees.

The biggest investment announced was for GM's Lansing Delta Township Assembly Plant, where GM will invest $520 million in tooling and equipment for future vehicles it did not name, retaining 1,900 jobs.

The automaker said it also will spend $139.5 million for a new body shop and stamping plant improvements at its Pre-Production Operations plant in Warren, retaining 200 jobs there.

GM did not immediately specify the $4.6 billion in remaining investment, but said it would provide details and identify the other plants earmarked for upgrades in the next several months. A company spokeswoman wouldn't comment on whether an announcement planned at Fairfax Assembly Plant in Kansas City, Kansas, on Monday is part of the $5.4 billion, but she said there will be several facilities involved in the total investment — including additional sites in Michigan. The investments also will retain about 15,300 jobs, GM said.

"We must offer products that are absolutely nothing short of outstanding, that offer our customers quality, performance, technology and true value like no other," GM North America President Alan Batey told a crowd of workers and guests gathered in the Pontiac plant . "Today, we're announcing total investment of $5.4 billion over the next three years to make it happen."

The investments follow many by automakers in lower-cost Mexico and come just a few months before GM begins bargaining the next four-year contract with union workers. But UAW Vice President Cindy Estrada said the investments aren't tied to bargaining.

"I think this investment is about the faith GM has in our ability to work together and build good product here in the United States," she told reporters following the announcement.

GM said all major body panel dies will be pre-tested at its Pontiac site, which will allow stamping plants to produce parts quicker and pre-production vehicles tested in Warren will bring to light issues before regular production begins. The body shop expansion there will include new equipment to support aluminum and steel vehicle body components. "All of it, every last dollar, is about improving our manufacturing capabilities," Batey said.

GM CEO Mary Barra and Batey are expected to visit the Fairfax plant Monday. The plant will build the next-generation Chevrolet Malibu due out later this year.

Future announcements could include a nearly $1.3 billion expansion at GM's Arlington Assembly Plant in Texas, where GM just received tax abatement approval from the city of Arlington. City officials there say that expansion will create 589 jobs and GM could save about $30 million in taxes over 10 years with its tax break approval. GM says it is still reviewing the business case for that project.

GM also has made recent big investment promises to Mexico, where automakers are increasingly turning to invest because quality has improved, wage rates are cheaper and because of foreign trade rules. In December, the Detroit automaker said it will spend $5 billion in Mexico over six years, dating from 2013 through 2018, and add 5,600 new jobs in the region, including about 4,400 in the future. At the time, GM said $1.4 billion had been announced or implemented and $3.6 billion would be forthcoming over the next four years.

Estrada said she is worried about Mexico investment and she'd like to see more invested in the United States.

"We're definitely concerned about Mexico," she said. "We're concerned that Mexico's wages are so low, we're concerned about whether or not they have real democratic unions."

Earlier this year, GM said it planned to boost capital spending in 2015 to about $9 billion, up from about $7 billion spent in 2014. GM Chief Financial Officer Chuck Stevens said GM over the next few years will boost spending for vehicle launches, including next-generation Malibu and Chevrolet Cruze sedans, next-generation compact and midsize crossovers, and new Cadillacs.

Last fall, GM received a tax abatement for a $32 million project for a new press-bay addition at the Pontiac Metal Center. The investment at Pontiac Metal Center, which has a workforce that is 70 percent two-tier, includes $100 million in a new building addition and press, and $24 million in already completed upgrades .

GM's Lansing Delta Township plant is home to the Buick Enclave, Chevrolet Traverse and GMC Acadia SUVs, which are due for next-generation models within the next few years. GM last fall announced a $63 million expansion there, including in the body shop for new robots and flexible tooling and in assembly and the paint shop.

GM since June 2009 has announced U.S. plant investments of about $16.8 billion, creating 3,650 new jobs and retaining about 20,700 other jobs.

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