By John D. Stoll
PONTIAC, Mich.-- General Motors Co. laid out a plan Thursday to
create 650 jobs by investing $5.4 billion in U.S. factories over
the next three years, an announcement that comes on the eve of
summer contract talks with the United Auto Workers.
The announcement, at a stamping plant in a Detroit suburb,
includes at least $785 million earmarked for Michigan facilities in
Warren, Pontiac and Lansing. It is unclear what specific government
incentives have been secured to pave the way for the investments in
Michigan and other states where GM makes auto parts or
automobiles.
GM's decision to outline billions in U.S. investment is a common
strategy for Big 3 auto makers in advance of quadrennial labor
talks with the UAW. Flush with profits, GM, Ford Motor Co. and Fiat
Chrysler Automobiles are expected to be pressed for pay increases
or richer profit-sharing plans.
This week GM won approval for $30 million in tax incentives from
Arlington, Texas, officials. The deal paves the way for a $1.3
billion expansion of an SUV factory to boost capacity of some of
the auto maker's most profitable vehicles and the likely addition
of jobs.
GM posted its highest North American profit in the first quarter
since emerging from bankruptcy--a result coming amid sizzling U.S.
auto sales and strong demand for trucks and SUVs. Its 8.8%
operating margin in the region is near the company's 10% near-term
margin target.
The Detroit auto maker filed bankruptcy in 2009 after a period
of taking measures to conserve cash, including underinvesting in
its U.S. manufacturing facilities. Since emerging from bankruptcy
six years ago, GM has announced or made $16.8 billion in U.S.
factory investments--actions that have led to 3,650 new jobs since
2011.
UAW Vice President Cindy Estrada, the lead GM negotiator, said
on Thursday that she doesn't believe the timing of the $5.4 billion
plan's announcement is a negotiating tactic, but said the
commitment reinforces her confidence in the relationship between
the union and the No.1 U.S. auto company.
"I don't think this investment was made because of bargaining"
she said following a speech to workers. "I think this investment is
about (union employees)...this investment defines the
relationship."
Write to John D. Stoll at john.stoll@wsj.com
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