The automotive stalwart in the U.S., General Motors (GM, Financial), announced last Thursday that it would be spending around $439 million on one of its major manufacturing plants in the U.S. that would mark a step towards expanding the home turf. The company has also confirmed that the capital expenditure would begin this summer, and the completion of the project at hand would take the next two years with investors now expecting the expansion to be completed by the end of 2017. In fact, GM stated earlier that it looks forward to invest around $5.4 billion in the U.S. on expansion of its major factories, and this is just a step towards the ultimate aim of spending this huge sum on building better and technologically adept manufacturing and assembly plants in the U.S. that would aid in competing with the peers comprising Ford Motors (F, Financial) and Fiat Chrysler Automobiles (FCAU, Financial). Let’s quickly take a peek into what has been shared on the current expansion program being taken up by the U.S. automotive major.
The expansion details
On May 21, GM announced that it would upgrade its Kentucky plant which mainly makes the Chevrolet Corvette sports car that has several buyers in the U.S. Since 1981, the model has been made at the Bowling Green, Kentucky plant. The major expansion would include building a new paint shop spanning over 450,000 square feet, which would be almost half the size of the current production plant at Bowling Green. Through constructing a new paint shop within the production facility, GM hopes to provide the Corvette fans more color options for the sports model. Besides the make of the paint shop, the automaker also expects to bring in upgraded robots and tooling features along with environmental enhancements at the same production facility to assist production of the model with maximum efficiency.
Arvin Jones, manufacturing manager for the North American region, commented per The Wall Street Journal,” With this major technology investment, we can continue to exceed the expectations of sports car buyers for years to come…”
GM has also indicated that this expansion would improve the employment scenario at the Kentucky facility which is now expected to create around 150 new jobs with the expansion in place. In fact, this announcement of expansion of this U.S. facility came just after the automaker decided to negotiate a new labor deal with the United Auto Workers (UAW) Union this fall.
This expansion deal is an aggressive move to keep upgrading its major facilities in order to compete better with its rivals who are also taking continuous measures to improve the production rate at their facilities.
Parting word
It might be stated that this expansion will help GM grow its Kentucky plant into a major Corvette maker in the upcoming years with all technological expertise existing at that facility. Analysts are taking this information on a positive note and the stock also traded up 0.34% at the closing bell last Friday after the news flew into the stock market. More will be understood after the expansion plan kicks off this summer; maybe we will have to wait and watch if the rivals also buck up their future plans to intensify the competition with GM further after the latter begins the execution of the plan at hand.
