GM to invest $877M for new body shop at Michigan plant

DETROIT – General Motors will spend $877 million to build a new body shop and assembly equipment at a Michigan assembly plant.

The investment at Flint Assembly, about 60 miles northwest of Detroit, is the latest announced portion of GM’s $5.4 billion capital improvement initiative at 40 U.S. plants.

“This investment will allow us to use a more innovative approach to deliver material between two critical facilities, reducing handling and the time it takes to ship parts,” said Cathy Clegg, GM vice president for North America manufacturing and labor relations.

The rolling announcements have come during early stages of negotiations between the automaker and the United Auto Workers union on a new national labor agreement. The company has committed to spend the money before hammering out details of the labor agreement.

While some Wall Street analysts have questioned why GM is rewarding workers before a contract, the spending symbolizes that labor has become a smaller portion of the cost of building cars and trucks and that updating tooling and physical plants is important at all times.

Work on the 883,000-square-foot body shop is expected to begin in the first half of 2016, with completion slated for 2018.

“In the last several years, GM’s investments in the city of Flint have topped $2.5 billion, creating hundreds of construction jobs and an economic boost for the community,” said Flint Mayor Dayne Walling. “This investment not only strengthens the ties between GM and the city, it demonstrates that Flint continues to play an important role in the resurgence of manufacturing in Michigan and the rest of the United States.”

The investment at the plant, which employs about 2,820 hourly and salaried workers, is in addition to $600 million GM has spent at the plant since 2011. Most of these investments will preserve existing jobs rather than create them.

The plant covers 3.7 million square feet. It was built in 1947 as part of GM’s post-World War II expansion. More than 13 million vehicles have rolled out of the structure, which enables customers buying Chevrolet Silverados or GMC Sierras to watch their trucks being assembled.