UPDATE 2-GM to invest $600 mln in Kansas City car plant

Mon Jan 28, 2013 2:46pm EST

* GM's largest plant investment since exiting bankruptcy in
2009
    * CEO 'optimistic' about talks for new deal with German
labor union
    * Akerson indicated fourth-quarter results will be strong


    By Carey Gillam
    KANSAS CITY, KANSAS, Jan 28 (Reuters) - General Motors Co
 on Monday said it will invest $600 million at its
assembly plant in Kansas City, Kansas, to build a new paint shop
and make other upgrades.
    The investment is part of the U.S. automaker's previously
announced plan to spend $1.5 billion on its North American
plants this year, up from the $436 million last year. GM invests
$8 billion annually on its operations globally. 
    GM Chief Executive Dan Akerson, speaking to hundreds of
workers, and state and local officials at the plant, said the
last four years at GM had been tough, but the automaker is now
in a "renaissance."
    "The tide has turned," he said, standing on the Fairfax
Assembly Plant's floor in front of Chevrolet Malibu and Buick
LaCrosse sedans on the assembly line. "GM is back."
    Akerson declined to say whether a new vehicle would be added
at the plant, but acknowledged "I don't think we'd be investing
this kind of money just to stand at the status quo." 
    He also indicated GM would report strong fourth-quarter
results next month and said he was optimistic about reaching
agreement on a new labor deal with the IG Metall union in
Germany.
    Last week, Vice Chairman Steve Girsky said in a letter to
employees that GM may close a German factory at its Opel
subsidiary earlier than proposed. He also said restructuring
talks with the union must be wrapped up in February.
 
    Akerson said February is not a deadline, however. "It was an
objective," he told reporters. "I would say I am cautiously
optimistic."
    The Detroit company said on Monday that production at the
Kansas City plant will not be affected by the work over the next
two years after it begins later this year. The work includes
adding a 450,000-square-foot paint shop, installing a new
stamping press and other upgrades, and is the company's largest
single plant investment since emerging from bankruptcy in July
2009. 
    The plant, which employs almost 3,900 people, built more
than 283,000 cars last year, up from 279,117 in 2011.
    GM, which has invested $10.2 billion in the North American
market since its 2009 bankruptcy and $50 billion U.S.
taxpayer-funded bailout, has said it will refresh 70 percent of
its U.S. vehicle lineup in 2012 and 2013.
    The new paint shop will occupy a new building and includes
substantial technology upgrades, including up to 50-percent less
energy use per vehicle and reduced emissions as well as reduced
water use, GM said. The new stamping press will replace the
current middle press used to create some of the structural
reinforcements for vehicle body frames, and is expected to
improve vehicle quality.
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