DETROIT General Motors, which is considering another expansion at its Arlington assembly plant, is planning to spend $5.4 billion to improve its U.S. factories during the next three years.
The company gave details of $783.5 million of the investments on Thursday and says the rest will be announced in coming months.
The investments are being made as Detroit automakers prepare for contract talks with the United Auto Workers union that will start this summer, and as many automakers including GM are announcing plans to build or expand factories in lower-cost Mexico. GM, like the others, is walking a line between moving more production south of the border while keeping the union happy with additional investments in the U.S.
GM said it will spend $520 million on equipment for future models at its Delta Township plant near Lansing, Mich. The company’s pre-production center in Warren, Mich., near Detroit, will get $139.5 million for a new body shop and metal stamping equipment. And the metal stamping plant in Pontiac, north of Detroit, will get $124 million.
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Spokesman Bill Grotz declined to say if any of the remaining $4.6 million would go to expand the Arlington plant that makes large SUVs. This week, the Arlington City Council approved creation of a reinvestment zone to offer tax incentives valued at $28.7 million as part of a proposed $1.29 billion renovation and expansion that would add 589 jobs.
The 60-year-old plant is running flat-out to meet demand for vehicles such as the Chevrolet Tahoe, which has seen sales rise 33 percent so far this year. Low gas prices have added to a shift in the U.S. market from cars to SUVs.
“The common thread among our investments is the focus on product improvements that benefit customers,” said Cathy Clegg, the company’s vice president of manufacturing.
GM says it has spent $16.8 billion on its U.S. facilities since emerging from bankruptcy in June of 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 factories 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.
A worker in Mexico costs car companies an average of $8 an hour, including wages and benefits. That compares with $58 for General Motors in the U.S., according to the Center for Automotive Research.