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GM plans $600M upgrade at Kansas City plant

GM plans $600M upgrade at Kansas City plant

January 29th, 2013 in News

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 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.

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.

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.