GM Investing More Than $1 Billion in Plants in Europe, North America

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by on Nov.24, 2014

General Motors is investing more than $1 billion in to plants in Europe and North America, including $40 million into its plant in Pontiac, Michigan.

General Motors is investing more than $1 billion in plants in Europe and North America to ensure the former achieves its goal of profitability while the latter can handle updates to existing vehicles as well as any new products.

Despite the fact that GM Europe has lost money for 17 years, the automaker plans to invest more than $300 million in Adam Opel’s home base in Rüsselsheim, outside of Frankfurt, Germany.

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Mary Barra, GM’s chief executive officer, said that a new model will be produced at Opel’s plant in Rüsselsheim by the end of the decade.

“This SUV will be the brand’s second flagship alongside the Insignia,” Barra said. As announced in March, $300 million will be invested in Opel’s Rüsselsheim plant to meet future requirements,” Barra said.

Barra also said additional investments of more than $600 million in the engine and transmission plants in Rüsselsheim, Kaiserslautern and Tychy, Poland, to provide the impetus for Opel to move to the next stage of a powertrain offensive that will yield new more fuel efficient engines and transmissions.

GM is investing $160 million into its highly automated plant in Orion Township, Michigan.

“Opel is of high strategic importance for GM,” Barra said. “The product offensive with 27 new models and 17 new engines has enjoyed a very successful start. These additional investments will help the brand shine again and further strengthen our position in Europe. They are a clear sign of GM’s commitment to Opel, to Germany and to Europe.”

GM is predicting that its European operations will finally turn a profit in 2016 after 17 years of losses stretching back to 1999. The prediction remains in spite of the fact that GM Europe, and its principal subsidiary, Adam Opel, face stiff headwinds as an economic downturn threatens Europe’s current auto sales renaissance.

Opel Group CEO Karl-Thomas Neumann he was delighted Barra’s show of support.

“General Motors and Opel are closer than ever before,” he said, explaining that Opel has General Motors’ full support. “The additional investments are further proof of the excellent cooperation.”

Neumann noted the decisions were made after a “constructive dialog” with employee representatives. They recognized the cooperation with the European employee representatives, the Industrial Metal Union and Opel’s general works council.

“The package of measures is based on existing collective labor agreement commitments. The agreement is an important prerequisite for the continuation of Opel’s ride in the fast lane. It helps to continue our growth course with safe and competitive jobs,” said Wolfgang Schäfer-Klug, the works council chairman.

Neumann also said Opel plans to add a third shift at Eisenach, Germany, as of mid 2015.

“This is good news for Eisenach as we are enjoying strong demand for the Adam and the new Corsa.”

GM also announced plans to invest an additional $200 million at plants in suburban Detroit.

General Motors plans to invest $200 million at plants in Orion Township and Pontiac to prepare the two plants for production of a new vehicle.

GM did not disclose the timing of the renovations of the Orion Assembly Plant or the Pontiac Metal Center on the city’s north side or an introduction date for the new vehicle. But GM executives said told analysts in October the company had plans to insure its passenger car line remained competitive with refreshed or new vehicles.

(GM injects new life into Opel with new Adam S. For more, Click Here.)

The investments in Pontiac are part of the nearly $300 million in Michigan-based investments that GM CEO Mary Barra referenced in a speech, GM said Friday.

Orion will receive $160 million for tooling and equipment, and Pontiac will receive $40 million for new dies.

(Click Here for details about the new partnership between Tesla and BMW.)

“Today’s announcement is a shot in the arm for these two terrific plants known for their teamwork and employee engagement,” said Cathy Clegg, GM North America Manufacturing vice president. “We’re committed to growing our brands and producing the highest-quality and safest vehicles for our customers.”

While no new jobs will be created by these actions, this announcement brings the total investment in Orion Assembly and the Pontiac Metal Center to $775 million since 2010. Across the U.S., GM has announced facility investment of nearly $11.4 billion since June 2009.

(To see more about Acura’s hopes for the revised ILX, Click Here.)

Even though the investments will not any new jobs, the United Auto Workers hailed the news.

“I’m confident that our members represented by UAW Locals 5960 and 653 will bring the same hard work and quality as they always do to the new vehicle program,” said UAW Vice President Cindy Estrada, who directs the union’s GM Department.

“UAW members are proud to be an integral part of an industry turnaround that makes investments such as this possible and an opportunity to show the success we can achieve when we work together.”

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2 Responses to “GM Investing More Than $1 Billion in Plants in Europe, North America”

  1. Jorge says:

    It would be nice to see Opel succeed again. I hope all of this expenditure does result in some new jobs not just increased automation.

  2. nobsartist says:

    GM will be bankrupt from the ignition scandal and cover up. 2016? Sure, just like they changed the corporate culture. More BS.