General Motors to invest US$5,4bn

GENERAL MOTORS Co said it will spend US$5,4 billion on its US plants during the next three years as the automaker prepares to build a series of new models.

The investment includes US$520 million for tooling and equipment at a plant near Lansing, Michigan that makes sport utility vehicles, US$139,5 million for a new body shop and improved stamping facilities in Warren, Michigan and US$124 million at a Pontiac, Michigan centre that makes steel body panels, GM said in a statement Thursday.

Details on the remaining US$4,6 billion will be provided “over the next several months,” the company said.

Separately, GM said it’s trimming 1 000 jobs at a factory in Canada as it moves output of the Chevrolet Camaro sports car to Michigan.

Thursday’s announcement brings to US$16,8 billion GM’s investments in its US facilities since exiting a government-assisted bankruptcy in June 2009, according to the statement.

The largest US automaker also has been investing outside its home country. A joint venture in China said last week that it plans to spend US$16 billion by 2020 to expand in that market, and GM in March said it will put US$5 billion into plants in Mexico.

The US investment comes as the Detroit-based company and the United Auto Workers union prepare for talks to replace a contract that expires in September.

Cathy Clegg, GM’s vice-president for North American manufacturing, said in the statement that it’s working “with our UAW partners” to exceed consumers’ expectations on quality.

UAW Response

Even as GM puts money into its US plants, the UAW is concerned about the company’s growing investments in Mexico, said Cindy Estrada, a union vice-president and head of its GM Department.

“We’re concerned about Mexican wages being so low and we’re concerned about whether they have real democratic unions,” Estrada told reporters after the GM announcement.

She said the UAW has discussed GM’s investment in Mexico with the company and wants to see more spending in the US.

“They announced US$5,4 billion in investment, I’m happy,” Estrada said. “Do I want more? Yes.”

At the Pontiac Metal Centre, where GM made the announcement, the company steadily has been expanding. The plant once stamped out steel panels only for subcompact cars and now makes bodies for 20 GM vehicles, said Tom Kurzyniec, shop chair for UAW Local 653, which represents workers at two Pontiac plants.

“The proof is around you that GM and the UAW are back,” he said.

Two-Tier Wages

Kurzyniec said 70 percent of the centre’s 450 workers earn the union’s second-tier wage, which starts at about US$16 an hour.

The hourly rate for veteran UAW workers is about US$28.

The union wants a raise for the second-tier employees, Kurzyniec said. At the same time, the lower-paid jobs have given those workers a way into the auto industry, he said.

In Canada, GM is offering early-retirement packages to about 1 000 workers at a plant in Oshawa, Ontario, according to a statement Thursday.

The factory builds the Camaro as well as the Chevy Impala, Buick Regal and Cadillac XTS sedans and Chevy Equinox SUV.

GM will stop building the Camaro in Canada later this year, when production of the new edition of the sports car moves to a plant in Lansing, Michigan.

When that happens, the automaker will need only about 2 600 of the Oshawa factory’s 3 600 workers, Faye Roberts, a GM Canada spokeswoman, said in an interview.

GM said it expects to take a US$200 million charge in the second quarter for the changes. — Bloomberg

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