KANSAS CITY, KANSAS (Reuters) - General Motors Co (GM.N) 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.
Additional Reporting By Ben Klayman in Detroit; editing by Sofina Mirza-Reid and Alden Bentley