Thursday, 30 April 2015

GM to invest $5.4 billion in US over 3 years

General Motors (GM) is to invest $5.4 billion in US plant improvements over the next three years, including $783.5 million for three Michigan facilities.
The Pontiac Metal Centre will see $124 million invested while two other investments include $520 million for tooling and equipment for future new vehicle programmes at the Lansing Delta Township assembly plant (retaining 1,900 jobs) and $139.5 million for a new body shop and stamping facility upgrades at pre-production operations in Warren.

Observers speculate that some of Pontiac Metal Centre's investment could be linked to a new press. GM has revealed that the $32 million project would include $30.3 million for a new press-bay addition expected to add 15 new jobs within two years after completion.

The Lansing Delta Township plant builds Buick Enclave, Chevrolet Traverse and GMC Acadia SUVs – all due for next-generation models within the next few years. Late last year, GM announced a $63 million expansion at the plant, including new robots and flexible tooling in the body shop, in assembly and the paint shop

GM executives say they will announce the remaining $4.6 billion of the $5.4 billion and identify the plants involved over the next several months.

All of the investments announced today refer to body plants. It is possible that upcoming investments could include investment on powertrain.

“The common thread among our investments is the focus on product improvements that benefit customers,” claimed Cathy Clegg, vice president of GM North America Manufacturing. “Together with our UAW partners, we’re working hard to exceed consumers’ ever-increasing quality expectations.”

All major body panel dies will be pre-tested in Pontiac under regular production conditions, enabling stamping plants to produce quality parts in shorter time; pre-production vehicles in Warren will surface issues long before regular production begins; and new products in Lansing will be among the best the company has built, she said.

The $5.4-billion new investment is equivalent to GM investing in US operations at the rate of about $5 million a day or $150 million every month for the next three years.

Since June 2009, GM has announced US facility investment of approximately $16.8 billion. About $11.4 billion of that has come since the 2011 UAW-GM National Agreement. In total, these investments have created 3,650 new jobs and secured the positions of approximately 20,700 others.

“By working together, the UAW and GM are making a difference in communities across the United States,” declared UAW vice president Cindy Estrada, who leads the union’s GM Department. “These investments represent the power of our collaboration to create jobs and improve competitiveness, quality and our manufacturing base in this country.”

GM and the UAW are due to begin a round of crucial pay negotiations shortly for the next four-year contract, hence today’s investment announcement ahead of those talks which are usually tied in with contract periods.

GM has been pushed into making investments, not only because of the forthcoming UAW talks but other automakers have been making prolific investments, most notably Ford.

“These (GM) investments are evidence of a company on the move, strategically investing in the people, tools and equipment to produce cars, trucks and crossovers that are built to win in the marketplace, with stunning design, quality and breakthrough technologies,” noted GM North America president Alan Batey.

GM chief executive officer Mary Barra and Batey were expected to visit GM's Fairfax Assembly Plant in Kansas City, Kansas, on Monday, to make announcements involving Fairfax, GM and customers. The plant will be build the next-generation Chevrolet Malibu due later this year and for which  the plant is receiving $174 million for plant and equipment.  In the actuality, Barra's visit turned out to be an anti-climax. She used the occasion to congratulate workers on the global production of the 500 millionth GM vehicle. GM claims it is the first car manufacturer in the world to achieve this. The occasion coincides with Vauxhall in the UK celebrating 90 years of ownership by the US company. In 2015, Barra said GM expects to sell over 1,000 new vehicles every day.

Meanwhile, last December, GM said it would spend $5 billion in Mexico over the six years from 2013 to 2018, adding 5,600 new jobs in the region, including 4,400 so far not announced. 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.

Earlier this year, GM claimed it planned to boost capital spending in 2015 to $9 billion, up from $7 billion spent in 2014.

GM’s chief financial officer Chuck Stevens has already promised GM would boost spending, including for next-generation Chevrolet Malibu and Chevrolet Cruze sedans, next generation compact and midsize crossovers and new Cadillacs.

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