General Motors Company (NYSE:GM), in one of its largest plant investments ever, announced on Monday its plans to invest $600 million in its Fairfax assembly plant, in Kansas City. The new investment includes a new 450,000-square-foot paint shop, a new stamping press and other updates. The automaker had already invested about $2 billion in Fairfax over the past decade.
Including this investment, General Motors Company (NYSE:GM) plans to invest $1.5 billion in its North American facilities this year to launch new products and boost sales. The construction for the new plants is expected to start this year and will complete in two years time.
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“This major investment is a vote of confidence in the employees and leadership of this plant,” G.M. chairman and chief executive Daniel F. Akerson said at a ceremony at Fairfax Financial Holdings Limited (PINK:FRFHF) (TSE:FFH) with hundreds of plant workers and government officials in attendance. Though the chairman did not reveal any hiring plans, officials say the new investment will require nearly 4,000 hourly and salaried employees on the job.
When GM was about to go bankrupt, the future of Fairfax plant was also questioned. The Fairfax plant, one of the company’s “foundational” plants, makes the Chevrolet Malibu and Buick LaCrosse.
The history of General Motors Company (NYSE:GM) and Fairfax goes back a long time, when bombers were built in World War II. The automaker started manufacturing cars in the same building in 1945. A new facility was constructed replacing the earlier plant in 1987, which costed about $1.1 billion. Over the years, GM had made some massive investments in the plant, including $722 million to launch the Chevrolet Malibu in 2003 and $651 million for the launch of the Saturn Aura, which is no longer produced.
The investment announcement comes at a crucial time for the company, when it toiling hard to win back the lost glory. In, another news today, Toyota Motor Corporation (NYSE:TM) (TYO:7203) overtook General Motors and Volkswagen AG (PINK:VLKAY) (PINK:VLKPY) in Global sales last year. This was an impressive comeback from the Japanese automaker, after recovering from natural disasters and a tarnished image due to quality issues. Toyota global sales increased by 23 percent to a record 9.75 million units in 2012, compared to 9.29 million units sold by GM and 9.07 million of Volkswagen.
For 2012, the company’s global sales were up about 3 percent with Chevrolet registering strong sales. This year, in US, General Motors Company (NYSE:GM) plans to launch more than a dozen new, redesigned or substantially upgraded models. GM has been posting profits in the last eleven quarters. The government, which invested about $50 billion at the time of bankruptcy, is planning to sell its remaining stake in the company within 14 months.