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GM plans $600M upgrade at Kansas City plant
Monday - 1/28/2013, 3:01pm EST
KANSAS CITY, Kan. (AP) - General Motors Co. announced plans Monday to pour $600 million into upgrades at its assembly plant in Kansas City, Kan., an investment that likely ensures the facility's long-term viability.
Construction on a new 450,000-square-foot paint shop, a stamping press and efficiency enhancements at the Fairfax Assembly Plant will begin this year and should take about two years to complete, GM Chairman and CEO Dan Akerson said.
"This major investment is a vote of confidence in the employees and leadership of this plant and will allow them to continue producing beautiful, world-class vehicles ... with the same quality workmanship that has defined the Fairfax complex for nearly 70 years," Akerson said during a visit to the plant.
Akerson told a crowd that included Gov. Sam Brownback, Mayor Joe Reardon and a few hundred Fairfax employees that the company was experiencing a "renaissance" and that the Fairfax plant would be among the automaker's "crown jewels." He said the $600 million was among the largest single-plant investments in GM's history.
GM, one of the Kansas' largest employers, announced earlier this month that it would invest about $1.5 billion in its North American facilities in 2013. The company has invested about $2.5 billion in the Fairfax plant in the last decade, showing the company's commitment to Kansas City, Akerson said.
GM nearly ran out of cash in 2008 and needed a $49.5 billion bailout from the U.S. government to stay in business. The company went through bankruptcy protection in 2009 to shed debt and burdensome contracts. Since then, a smaller, leaner GM has made money for 11 straight quarters and piled up $16 billion in profits.
"You all have been through some times," Akerson said. "In fact, the last four years have been really tough. They've been lean. But the tide has turned. .... By way of your commitment, your tenacity, your persistence, your support, we have done more than just survive. GM is thriving with the best in the industry."
The U.S. government got stock in GM in exchange for the bailout, and last month GM bought back 200 million of its shares for $5.5 billion. The government still holds 300 million shares, but has pledged to sell them by early next year.
GM sold 9.29 million cars and trucks worldwide in 2012, making it second only behind Japan's Toyota in global sales.
Production at the Fairfax plant, where the company makes the Buick LaCrosse and Chevrolet Malibu, is not expected to be affected by the construction, the company said. GM said the upgrade is designed to cut the amount of energy required to build the cars and reduce water consumption and chemical waste at the 572-acre site.
Akerson said Fairfax will be among the company's most efficient, state-of-the art facilities.
GM employs nearly 3,900 workers at the plant, which has produced more than 12 million vehicles since 1945 and currently builds one vehicle every 58 seconds. The Chevrolet Malibu and Buick LaCrosse are made at the plant.
"It is amazing to have this kind of money put in this plant," said Joan Kelly, a quality engineer manager who has worked at Fairfax for nearly 29 years. "It means we're going to be around for a long time.
"It's a testament to the Midwest work ethic. I'm glad to see this money spent in the middle of America."
An investment this large means that Fairfax could get additional models. At a minimum, it is likely to get future generations of the Malibu and LaCrosse.
"If they're going to be putting a lot of money into a plant like that, you'd better keep it around a while," said Jim Harbour, author of a book on auto manufacturing and the man who developed a widely followed annual measure of factory productivity.
Brownback said the investment would help boost the state's economy. "GM is back, and Fairfax is here to stay," the Republican governor said.
Both the LaCrosse and Malibu have been decent sellers for GM in the past, but sales have slowed of late. U.S. sales of the LaCrosse, a big midsize luxury sedan, fell 2.4 percent last year to just over 57,000, according to Autodata Corp. Malibu sales rose 3 percent to almost 211,000, but that's a little more than half the sales of the Toyota Camry, the midsize leader and the top-selling car in the U.S.
GM launched a new version of the Mailbu in 2012, but it took until late in the year for the full selection of engines to arrive in showrooms. The company has said it will get a quick makeover this year.
AP Auto Writer Tom Krisher in Detroit contributed to this story.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)