GM Commits $1.3 Billion to Upgrade Midwest Plants, Stock Posts New High

Cars and Drivers

Published: December 16, 2013 1:23 pm

Last Updated: April 27, 2020 10:10 pm

General Motors Co. (NYSE: GM) announced Monday that the company would invest $1.3 billion in five manufacturing sites in the Upper Midwestern states of Michigan, Ohio, and Indiana. The plants produce the company’s new V6 engine, a new 10-speed transmission, and the existing 6-speed transmission.

The commitment to its Midwest operations is also a victory for the United Auto Workers (UAW) union, which has seen the number of GM’s U.S. workforce dwindle from about 92,000 to 85,500 since 2008. The company had originally planned to close 17 facilities beginning in 2009, costing 20,000 jobs. The government bailout saved most of the proposed job cuts and the company repaid about $40 billion of the original bailout total of $51 billion.

GM said in its announcement that it has invested about $10.1 billion in its U.S. operations since 2009 creating or retaining more than 26,000 jobs.

Interestingly, GM’s executive vice president and North American president Mark Reuss mad today’s announcement. CEO-designate Mary Barra was not cited in the announcement, nor was retiring CEO Dan Akerson. Reuss commented:

GM is committed to a strong American manufacturing base and creating jobs in dozens of communities throughout the country. Today’s announced plant upgrades continue the momentum of a resurgent auto industry.

Sales at GM are up nearly 9% for the first 11 months of 2013 and the company estimates that new car sales in the U.S. will reach a seasonally adjusted annual rate of more than 16 million vehicles from all manufacturers by the end of this month. GM has sold 2.56 million vehicles in the U.S. through November and leads in U.S. market share with 17.1% of all new car sales.

Shares are up 2.6% in early afternoon trading at $41.09 after posting a new 52-week high of $41.17. The 52-week low is $24.65.

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