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GM expands with $2bn investment, 4,000 jobs

May 11, 2011 9:45 AM ETGM
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Following turbulent years of declining auto sales and cutbacks, General Motors (NYSE:GM) will continue on its path of recent growth, and spend US$2 billion to invest in 17 plants across eight states, creating more than 4,000 jobs, it said Tuesday.

"We are doing this because we are confident about demand for our vehicles and the economy," said GM Chairman Dan Akerson.

These new funds are in addition to the US$3.4 billion investment, and more than 9,000 jobs GM has either added or saved in the past two years, since emerging from bankruptcy in 2009.

In its factory in Toledo, where Akerson made the announcement, GM will invest about US$204 million to build a new fuel-efficient 8-speed transmission, and will add or save about 240 jobs.

During the first four months of this year, sales were up 24.8% from the same period in 2010, and last week, the company reported a $3.2 billion profit - its fifth successive quarterly gain since restructuring operations in 2009.

Over the ensuing months, GM will herald new facility investments, pending state and local incentives.

The Center for Automotive Research predicts "the ripple effect" of the planned investments will add roughly US$2.9 billion to U.S. GDP and create or retain 28,000 jobs.

GM, which sells Cadillac, Buick, GMC, and Chevrolet vehicles, employs about 200,000 people worldwide. In Tuesday trading, the company's shares rose 1% to $31.53. They are still trading below their IPO price of US$33 back in November.

The U.S. government owns about 26.5% of GM, having cut its stake from 61% in the aftermath of the automaker's $50 billion bailout in 2009.

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