General Motors Co.'s beleaguered hometown is getting a
lifeline.
The auto maker will spend $877 million to upgrade a truck
factory in Flint, Mich., amid solid demand for its Chevrolet and
GMC full-size pickups. Located about an hour's drive north of
Detroit, Flint is the location of GM's 1908 founding that has never
fully recovered after being hard hit when several plants were
closed in the 1980s.
The investment caps GM's $5.4 billion investment plan for its
U.S. factories through 2017. GM has outlined a series of
investments in five states during the past few months as executives
prepared to negotiate a new labor deal with the United Auto Workers
union.
A workforce of 2,800 in Flint build the heavier duty versions of
the Chevrolet Silverado and GMC Sierra pickups, profitable models
that have fared well amid economic growth and low gasoline prices.
GM pickup sales increased 15% over the first seven months of
2015.
More than $1 billion has been invested in the 68-year-old Flint
factory since GM emerged from bankruptcy in 2009. The new
investment is aimed at building a new body shop and making
assembly-line improvements, but it won't result in new jobs.
GM has increased capital expenditures since Chief Executive Mary
Barra took the helm last year. In recent months, for example, the
company has announced a $5 billion plan to create a family of
Chevrolets for emerging markets, $12 billion to remake Cadillac and
$14 billion to maintain leadership in China.
Last month, GM kicked of negotiations with the UAW ahead of a
Sept. 14 expiration of the current four-year contract covering
51,000 hourly workers.
Auto makers often use the promise of new jobs to gain leverage
at the negotiating table. With all three U.S. car makers—GM, Ford
Motor Co. and Fiat Chrysler Automobiles N.V.—making healthy profits
in North America, UAW officials have said they plan to push for
increased pay and benefits for members in the current talks, even
as auto executives say maintaining a low fixed cost base is
essential.
GM's biggest investment under the $5.4 billion plan is a $1.3
billion update for an Arlington, Texas, factory that builds the
company's largest and most expensive SUVs, the Chevrolet Suburban
and Cadillac Escalade.
Write to Christina Rogers at christina.rogers@wsj.com
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