April 17, 2024

G.M. to Spend $2 Billion in Hiring and to Upgrade U.S. Plants

The company said its plans to upgrade 17 plants in eight states would create or save more than 4,000 jobs.

G.M.’s chief executive, Daniel F. Akerson, made the announcement at a transmission plant in this northern Ohio city, where the company will spend $204 million and retain 250 jobs.

“We are doing this because we are confident about demand for our vehicles and the economy,” Mr. Akerson said.

G.M. did not specify where and when it would make all the investments, preferring to announce positive news periodically to underscore its recovery from its 2009 bankruptcy.

“There’s always going to be naysayers and there’s always going to be people who buy a G.M. product no matter what,” said Rebecca Lindland, an analyst with the research firm IHS Automotive. “It’s about influencing those people who are in the middle.”

About 1,350 of the jobs cited will be filled by current G.M. employees who are on layoff. Once those workers are recalled, the remaining positions will go to new hires at a lower wage rate.

The company’s contract with the United Auto Workers union allows it to hire new workers at wages of $14 an hour — half what it pays existing hourly employees.

The two-tier wage scale is expected to be a major topic at the bargaining table this summer, when G.M., Ford and Chrysler all negotiate new contracts with the U.A.W. The current four-year agreements expire in mid-September.

The U.A.W. vice president in charge of the G.M. division, Joe Ashton, said he expected all the laid-off workers to be recalled before the contract expired.

Mr. Ashton declined to say what changes the union might seek in the two-tier system during the negotiations.

“They will be discussed at the table,” he said.

The union’s president, Bob King, has said the U.A.W. hopes to get back some of the concessions it made during the last round of negotiations, in 2007, when Detroit’s Big Three were in dire financial condition.

Since then, both G.M. and Chrysler were bailed out by the American taxpayers and drastically restructured in bankruptcy court. Ford recovered on its own without federal assistance and has reported healthy profits over the last two years.

G.M.’s announcement of new jobs and investments came after the company’s announcement last week that it earned $3.2 billion in the first quarter of this year.

The company has been steadily revamping its product lineup since emerging from bankruptcy in the summer of 2009, adding more fuel-efficient small cars and crossover vehicles.

The transformation is starting to produce better sales and greater market share against rivals. G.M. reported domestic market share of 19.6 percent in the first four months of this year, compared to 18.7 percent for the same period a year ago.

“For the first time in a generation, in the last year we took market share,” said Mr. Akerson.

G.M. has 49,000 hourly workers in the United States — less than half the number it had five years ago.

Since emerging from Chapter 11 bankruptcy protection in July 2009, G.M. had committed to investing $3.4 billion in its plants and to creating or preserving an estimated 9,000 jobs.

Tuesday’s announcement of an additional $2 billion in investment is another step in the rebuilding process. In addition to the improvements in Toledo, the company said last week that it would spend $131 million at an assembly plant in Kentucky.

The United States government still owns a 26 percent stake in the automaker as part of the $50 billion taxpayer bailout. The Treasury Department could begin selling some of its remaining shares as soon as May 22, the first day it will be permitted to sell them under terms of G.M.’s initial public stock offering.

G.M. has ample cash reserves of more than $36 billion to upgrade and expand manufacturing facilities such as the Toledo plant.

“They’re spending money so they can make money,” said Ms. Lindland. “And the more profitable they are, the better chance they have of decreasing the ownership of the government.”

Nick Bunkley contributed reporting from Detroit.

Article source: http://feeds.nytimes.com/click.phdo?i=778ca28b10b3afc58ffa29506edb5236

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