GM to invest billions of dollars in U.S. plants: source

By Reuters

Apr 30, 2015 05:56 AM EDT

General Motors (GM.N) on Thursday will announce a multibillion-dollar, multiyear investment in several U.S. manufacturing plants in a move to boost production and vehicle quality, a person familiar with the matter said.

GM has scheduled a press conference at its stamping plant in Pontiac, Michigan, to make a "major U.S. manufacturing announcement." A spokesman declined to provide further details.

The largest U.S. automaker is expected to reveal plans to make capital investments in plants and equipment, including body shops and stamping plants, said the person, who asked not to be identified. The investments are expected to create jobs, but it is unclear how many.

The announcement comes as GM and the United Auto Workers union gear up to negotiate a new master contract this fall for GM's roughly 50,000 U.S. hourly workers. UAW leaders have pushed for the Detroit automakers to invest in union-represented factories.

GM has budgeted $9 billion for global capital spending in 2015, up from last year's $7 billion, to pay for vehicle launches and investments in new technology. It has historically spent about two-thirds of its capital outlay in North America and officials have said that would remain true going forward.

The U.S. plants receiving the new investments will not be identified, the source said, but will likely include the Pontiac plant at which the announcement will be made. The plant stamps metal parts used for 20 different vehicles.

Separately, GM is weighing a $1.3 billion investment in its large SUV plant in Arlington, Texas, that would add 589 jobs. City officials in Arlington are expected on Wednesday night to give necessary approvals for the project.

GM has said only that it is looking at investing in the Texas plant to fund upgrades and no decision has been made, but it has told city officials it wants to move fast.

GM executives have talked about their desire to break bottlenecks at the Texas plant that have held back production of highly profitable big SUVs like the Cadillac Escalade. Most GM truck plants have been running at or near full capacity to meet demand.

Automakers have been wary of adding too much production capacity in North America, and risk undoing gains in pricing power they have achieved since making painful cuts during the financial crisis. GM and rivals have instead pushed to increase output at existing plants using additional shifts, overtime and investments to improve efficiency.

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