GM to make $600 million investment at its Fairfax plant

01/28/2013 12:59 PM

01/28/2013 1:00 PM

General Motors today announced plans to invest $600 million in its Fairfax assembly plant in Kansas City, Kan. That includes a new 450,000-square-foot paint shop, the installation of a new stamping press and other updates.

It is one of GM’s largest plant investments ever, and builds on nearly $2 billion invested in Fairfax over the past decade. Altogether, the automaker intends to invest $1.5 billion in its North American facilities this year, as it rolls out new products and tries to boost sales.

“This major investment is a vote of confidence in the employees and leadership of this plant, ” GM chairman and chief executive Daniel F. Akerson said at a ceremony at Fairfax with hundreds of plant workers and government officials in attendance. This is only the second time that Akerson has visited one of the company’s plants to make an announcement.

While Akerson did not mentioned any hiring plans in his prepared remarks, GM officials said the paint plant and other upgrades will keep the plant’s nearly 4,000 hourly and salaried employees on the job.

GM said the construction will begin this year and should take about two years to complete.

The Fairfax plant makes the Chevrolet Malibu and Buick LaCrosse and is seen as one of the company’s “foundational” plants. Just three years ago, the future of Fairfax was in doubt as GM entered bankruptcy.

It now has 3,561 hourly and 316 salaried employees who annually collect wages and benefits worth $424 million. Frank Lenk, chief economist for the Mid-America Regional Council, said the manufacturing plant has more of an economic punch than most other businesses in part because of the need for suppliers, and ends up creating 9,500 additional spinoff and indirect jobs.

GM has a long history in Fairfax, where bombers were built in World War II. In 1945, GM started making cars in the same building where the planes had been assembled. In 1987, the dated facility was replaced by the current plant, which continues to be an economic linchpin for Kansas City, Kan., and the rest of the area.

The company has also made big investments in the plant over the years, although government incentives absorbed some of the cost. The new plant cost $1.1 billion in 1987, and GM spent $722 million to launch the Chevrolet Malibu in 2003 and $651 million for the launch of the Saturn Aura, which is no longer produced.

In 2012, GM’s global sales were up about 3 percent, and Chevrolet sold a record number of vehicles.

And this year, just in the U.S., GM will launch more than a dozen new, redesigned or substantially upgraded models. The LaCrosse, built at Fairfax, will get a major upgrade this year.

GM has posted 11 consecutive quarters of profits. The federal government, which invested about $50 billion to help save the company, has said it will sell its remaining stake in the company within 14 months.

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