GM to invest $877M for body shop in Michigan

General Motors will spend $877 million to build a new body shop and assembly equipment at its Flint Truck Assembly plant in Michigan.

The investment is the latest announced portion of GM's $5.4-billion capital improvement initiative at 40 U.S. plants.

GM has a complicated past with Flint. The company's massive expansion in the first half of the 20th Century helped make Flint a rich town. But the city declined precipitously over the last several decades as GM closed plants amid declining market share.

In recent years, GM has reduced some operations further while expanding others in the Flint area.

“This investment will allow us to use a more innovative approach to deliver material between two critical facilities, reducing handling and the time it takes to ship parts,” said Cathy Clegg, GM vice president for North America manufacturing and labor relations.

The rolling announcements have come during early stages of negotiations between the automaker and the United Auto Workers on a new national labor agreement. The company has committed to spend the money before hammering out details of the labor agreement.

While some Wall Street analysts have questioned why GM is rewarding workers before a contract, the spending symbolizes that labor has become a smaller portion of the cost of building cars and trucks and that updating tooling and physical plants is important at all times.

Work on the 883,000-square-foot body shop is expected to begin in the first half of 2016, with completion slated for 2018.

“In the last several years, GM’s investments in the city of Flint have topped $2.5 billion, creating hundreds of construction jobs and an economic boost for the community,” said Flint Mayor Dayne Walling. “This investment not only strengthens the ties between GM and the city, it demonstrates that Flint continues to play an important role in the resurgence of manufacturing in Michigan and the rest of the United States.”

The investment at Flint Truck, which employs about 2,820 hourly and salaried workers, is in addition to $600 million GM has spent at the plant since 2011, primarily for a new paint shop. Most of these investments will preserve existing jobs rather than create new ones. Hourly workers are represented by UAW Local 598.

The plant covers 3.7 million square feet. It was built in 1947 as part of GM's post-World War II expansion. More than 13 million vehicles have rolled out of the structure, which enables customers buying heavy-duty Chevrolet Silverados or GMC Sierras to watch their trucks being assembled.

Flint is one of three assembly plants producing full-size and heavy duty pickup trucks. The others are in Ft. Wayne, Ind., and Silao, Mexico.