In its largest U.S. investment this year, General Motors announced plans on Tuesday for $1.4 billion in improvements to its Arlington Assembly Plant to help improve production of its popular full-size sport utility vehicles.
The renovation and expansion will reconfigure the plant with a new paint shop, body shop and general assembly area upgrades. Construction is expected to begin this summer and take about three years to complete. Production schedules for Chevrolet Tahoes and Suburbans, GMC Yukons and Yukon XLs and Cadillac Escalades will be unaffected by the construction.
Hundreds of Arlington workers cheered the announcement from bleachers set up inside the plant.
“When it comes to full-size SUVs, Arlington is where the magic happens,” said Cathy Clegg, GM’s vice president of North America Manufacturing and Labor Relations. “These vehicles are vital to the success of our company. That’s why it’s so crucial to keep this facility running on all cylinders.”
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Demand for GM’s big SUVs has been so strong that GM has been running three shifts in Arlington to meet demand.
The project is part of $5.4 billion that GM is investing in its U.S. manufacturing operations over the next three years, company officials said. Since June 2009, GM has announced about $17.8 billion in U.S. plant improvements. Last fall, GM opened a stamping facility as part of a $530 million expansion and overhaul of the Arlington plant.
Wayne Skutt, an electrician in the body shop, was among the employees applauding the news.
“We need all the investment we can get,” said the 30-year veteran of six GM plants. “We need all the job security we can get.”
Henry McClellon, team leader for trim installation, said he’s “not impressed,” especially since contract talks between the United Auto Workers union and GM have just begun.
“The announcement is good, but it’s contract time, so I just look at it like … is this to influence us on the contract?” said McClellon, who moved to work at the Arlington plant in 2009. “It’s still business.”
In April, the Arliington City Council approved creation of a tax reinvestment zone to provide $28.7 million in tax breaks to the Detroit-based company in exchange for maintaining at least 3,179 jobs. That’s an increase of 589 jobs over GM’s previous commitment to the city, made in an abatement deal for the new stamping facility, city officials said.
Raising the minimum employment level provides “enough of a cushion” so that a sudden economic downturn “reasonably would not affect their abatement,” said Bruce Payne, the city’s economic development director.
The GM Arlington workforce is well beyond that threshold, currently numbering 4,180 employees, GM officials said.
Arlington Mayor Jeff Williams, who drummed up cheers by disclosing that he owns a 2015 Chevy Suburban, said the plant’s history is intertwined with Arlington’s. He noted that the city’s population was 8,000 when the plant opened in 1954 with about 1,800 workers. Now the city is teeming with about 380,000 residents.
“You symbolize the can-do spirit of Arlington, Texas,” he told the workers. “You know, we’re known throughout the state as a city that can get things done. … You have made a difference.”
He added, “Isn’t it amazing when Arlington and Tarrant County, the state of Texas and General Motors, the success we have all realized?”
Tarrant County Administrator G.K. Maenius applied the math to the plant’s growth.
“With the addition of this expansion, it will have increased by 41/2 times its size since it was first built,” he told the gathering. “This is management. Obviously this is labor. And it is everything else that we could come together to put together, to make sure this is the the No. 1 quality plant that GM has, not only in the United States but in the world.”
The investment comes as Detroit automakers launch into contract talks with the UAW amid other plans to build or expand factories in Mexico to take advantage of lower costs. GM, like the others, is working to move some production south of the border even as it makes additional investments in the U.S.
GM says it has spent $16.8 billion on its U.S. facilities since emerging from bankruptcy in June 2009, creating more than 3,650 new jobs and preserving 20,700 others.
But in December, the company announced plans to invest $5 billion to modernize and expand four plants in Mexico. In March, the company said it would spend $350 million on its Ramos Arzipe assembly plant so it can build the compact Chevrolet Cruze, which also is made at GM’s factory in Lordstown, Ohio, east of Cleveland.
“I don’t like that,” said Cindy Estrada, a UAW vice president, during an interview after her public remarks. “I think we need to continue to invest in the United States. UAW workers have shown that we build great quality, and we have great efficiencies in our plants. And because of that, GM is making a great profit. So I think the investment should happen here — and they are investing here.”
In Mexico, a worker costs automakers average of $8 an hour, including wages and benefits. General Motors pays $58 per worker in the U.S., according to the Center for Automotive Research.
City Councilwoman Kathryn Wilemon, who attended the announcement, said the news takes her back to her childhood.
“I can remember when that was vacant land, because I lived near there,” Wilemon said. “I was there in 1954 when it opened, and I was there for all of the expansions. And today still topped all of our expectations for the growth of General Motors in Arlington.”
Robert Cadwallader, 817-390-7641