Business

GM to expand work in Kansas

KANSAS CITY, Kan. —General Motors Co., hoping to seize on its hot-selling sedans and a growing trust in American-made cars, said Wednesday that it will pour $257 million into expanded production at its plants in Kansas and Michigan.

Before a crowd of about 300 workers and political dignitaries at the GM's Fairfax Assembly Plant in Kansas, CEO Ed Whitacre said the money would pay for significant production-line expansions at Fairfax and the Detroit-Hamtramck plant, both of which will build the next generation of the popular midsize Chevrolet Malibu.

Whitacre said $136 million would establish Fairfax as the Malibu's main production facility, news that drew loud cheers from the crowd because it cements, at least for the near future, the role of Fairfax and its nearly 4,000 employees.

The news was also the second shot of positive publicity for GM in as many days. On Tuesday, Whitacre said the automaker had repaid the $8.1 billion in loans it got from the U.S. and Canadian governments, an early payback that Whitacre said is a sign the automaker is recovering.

"We are able to repay the taxpayers ahead of schedule because we are designing, building and selling the best cars and trucks General Motors has produced ever," Whitacre said. "We pledge to use these funds to restructure the company, to reinvest in our people and our plants, create new jobs.... Today we are doing exactly that."

The factory investments in Kansas and Michigan, where $121 million will be used to expand Malibu production in Detroit-Hamtramck, likely won't create new jobs but should preserve what's already there.

Fairfax has 3,869 workers who also build the midsize Buick LaCrosse luxury sedan. At Hamtramck, which has 1,048 employees, GM now builds the Cadillac DTS and Buick Lucerne large sedans and is gearing up to make the Chevrolet Volt rechargeable electric car.

GM got a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments as it went through bankruptcy protection last year. The U.S. considered $6.7 billion of the aid a loan, while the Canadian governments held $1.4 billion in loans.

"We've developed a healthy, clean balance sheet, and we've developed a cost structure that allows us to be competitive," Whitacre said.

During the financial crisis that led to GM filing for bankruptcy protection last year, the automaker closed 14 factories and shed more than 65,000 blue-collar jobs in the U.S. through buyouts, early retirement offers and layoffs. The company now employs about 40,000 hourly workers in the U.S.

GM North America president Mark Reuss told reporters during a conference call later Wednesday that most GM plants are operating at full capacity because of the success of its new products.

"Generally speaking, we're 100 percent utilized here in North America, which is not a bad place to be," he said.

Along with the popular LaCrosse and Malibu models, GM is pinning its hopes on small SUVs, such as the Chevrolet Equinox and GMC Terrain, and the Cadillac SRX Wagon.

Reuss said he expected more action in the near future to expand capacity at other plants, but he wouldn't say where. GM has about 70 days of inventory across the company, he said.

GM's moves come as a new poll finds that slightly more Americans now say the U.S. makes better-quality vehicles than Asia, with 38 percent saying U.S. cars are best and 33 percent preferring autos made by Asian companies, according to an Associated Press-GfK survey.

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