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Smelling Turnaround, GM Reveals Aggressive U.S. Investment Plan

Today’s news makes for quite a rebound for GM, which next month will mark two years removed from a $50 billion taxpayer-funded bankruptcy.

TOLEDO, OH – General Motors Chairman and CEO Dan Akerson confirms plans by the restructured auto maker to invest $2 billion at some 17 U.S. manufacturing sites, with expectations to create and retain more than 4,000 jobs.

“If the market continues to recover, we are confident that GM will hire new workers to meet the strong demand for the products our (United Auto Workers union) members build,” Akerson says at a transmission plant here, which will receive $204 million and add about 250 jobs to build an all-new, fuel-saving 8-speed automatic gearbox.

GM says it will detail additional facility investments “over the next few months,” depending on successful completion of negotiations involving state and local incentive packages.

The planned hiring will bring GM back to full hourly employment levels, the auto maker says. It also will cause a ripple effect that will add $2.9 billion to the U.S. gross domestic product and create or retain more than 28,000 jobs, GM says citing data from the Center for Automotive Research.

Ohio Gov. John Kasich and UAW Vice President Joe Ashton, who chairs the labor organization’s GM department, join Akerson for the announcement.

Other winners likely will include the auto maker’s Fort Wayne, IN, and Arlington, TX, truck assembly plants.

GM recently confirmed to Ward’s it seeks tax breaks in Fort Wayne and Arlington ahead of investing $240 million and $250 million, respectively, in upgrades to accommodate the launch of the next-generation trucks due in 2013 as ’14 models.

Last week, GM announced a $131 million investment in its Corvette assembly plant in Bowling Green, KY. The new Corvette will arrive no sooner than 2013, GM North America President Mark Reuss said.

Detroit-Hamtramck also likely will see a chunk of the investment. The plant currently builds the Chevrolet Volt extended-range electric vehicle, as well as the Buick Lucerne and Cadillac DTS. But GM phases out production of the Lucerne and DTS large sedans later this year and will add the redesigned-for-’13 Chevy Malibu to the facility next year.

GM’s Fairfax, KS, assembly plant serves as the primary builder of the Malibu and has begun tooling up for the car’s launch.

The auto maker’s Orion Twp., MI, facility currently is preparing for the launch of the Chevy Aveo and Buick Verano small cars later this year, while GM’s Lordstown, OH, plant reached 3-shifts late last year on the new Chevy Cruze compact car.

Earlier this year, Reuss announced GM would add a third shift in the third quarter at its Flint, MI, heavy-duty pickup plant, adding 750 jobs, although most workers will come from other sites and a pool of employees currently on layoff.

In Lansing, MI, the auto maker previously announced its Grand River assembly plant will get $190 million and add 600 jobs to build a new entry-level Cadillac below the CTS currently codenamed ATS and meant to take on the BMW 3-Series and Mercedes-Benz C-Class.

Expect other investments at powertain and stamping facilities supporting those assembly sites.

It remains unclear what GM plans for assembly plants in Spring Hill, TN; Janesville, WI; and Shreveport, LA. Spring Hill and Janesville are on “standby status,” which means tooling remains onsite and the facilities could be restarted quickly if more capacity is needed.

The outlook for Shreveport is gloomy. During its bankruptcy proceedings, GM placed the facility among unwanted assets targeted for liquidation. The plant makes small pickups and has no product scheduled beyond June 2012.

Today’s news makes for quite a rebound for GM, which next month will mark two years removed from a $50 billion taxpayer-funded bankruptcy that shed thousands of jobs and shuttered a number of U.S. manufacturing facilities.

Since then, GM has invested $3.4 billion in its U.S. operations to create or maintain some 9,000 jobs. The restructured auto maker also posted its first annual profit last year with $4.7 billion of net income and last week reported a first-quarter 2011 profit of $3.2 billion.

GM also carries a balance sheet wiped clean of debt during Chapter 11 and labor costs now on par or below those at the U.S. operations of its Asian rivals.

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