General Motors announced Monday that it will invest $1.3 billion in U.S. manufacturing in five Midwestern plants. This comes after the U.S. government last week announced it has completely pulled out of ownership of GM stakes.
This is expected to maintain or create close to 1,000 jobs in Michigan, Ohio and Indiana.
The largest sum, $600 million, will be spent in Flint, Mich., at the company's oldest auto assembly plant. This is a symbolic investment after a 1989 documentary showing the devastation of GM initially pulling out plants from the city.
Just more than $493 million will also be invested in Romulus, Mich., and $121 million in Detroit. Close to $30.6 million will be invested in Toledo, Ohio and $29.2 million in Bedford, Ind., and the money will go toward the production of a new fuel-efficient six-cylinder engine, a new 10-speed transmission, updates to a 6-speed transmission, and logistics operations.
GM chief executive Dan Akerson said Monday to the National Press Club that even though the government sale of GM led to a net loss for taxpayers, the aided success of the company was an ultimate gain for taxpayers. GM announced that it has invested $10 billion in U.S. plants in four years, employing close to 7,500.
The U.S. earned back $39 billion of the $49.5 billion invested in 2009 in GM. This was part of the Troubled Asset Relief Program that bailed out auto companies and financial institutions that had a significant impact on the economy. It earned GM the nickname "Government Motors," but investor confidence has been pouring back into the automaker as it stands back up on its own two feet.
The news also comes as GM announced last week a new CEO, Mary Barra, to lead the company into 2014. It also comes as GM announced a rollback of Australian operations in a global shakeup of the company.
Shares of GM rose close to 3 percent Monday.
[Wall Street Journal]
[Detroit Free Press]