Ford, GM, Chrysler to update Midwest factories, add jobs
Growing again after years of downsizing, General Motors and Chrysler announced more plans Thursday to renovate plants and restore Rust Belt jobs to build a new generation of cars.
And Ford Motor earlier this week announced plans for investment and new jobs at four plants in a bet that the slow recovery eventually will mean more demand for cars.
The plans show that Detroit’s Big Three are slowly getting back on their feet after the dismal recession sales years and GM and Chrysler reorganizations — and buoy hope that the upper Midwest can start denting its years of high unemployment.
The latest automaker announcements:
•Chrysler. The smallest of the three, now controlled by Fiat, said it will invest $600 million in its Belvidere, Ill., plant to prepare for building new vehicles there in 2012.
The investment and new vehicles will save the jobs of 2,349 workers there now making vehicles whose runs are scheduled to end.
The plant now makes Dodge Caliber compact sedans and Jeep Compass and Patriot small crossovers. Chrysler did not say what new vehicles the plant will produce, but speculation has centered on Chrysler-branded products based on Fiat or Alfa Romeo vehicles from Italy.
•GM. The Lansing Grand River plant will add 600 jobs and a second shift following GM’s investment of $190 million to make a new small Cadillac— a compact smaller and less expensive than its CTS line that already is made at that plant in Michigan’s capital city.
•Ford Motor. The only one of Detroit’s Big Three not to go through bankruptcy court said earlier this week that it will sink $850 million into Michigan plants through 2013 and add 1,200 jobs.
The spending will be spread over several plants, including Van Dyke Transmission, Dearborn Truck, Sterling Axle and Livonia Transmission.
At 13%, Michigan was second only to Nevada in state unemployment rates in September.
As part of their expansions, the Detroit trio are investing more into making small cars in the U.S., rather than in South Korea or Mexico, as they have in past years. Driving that in part are wage and benefit concessions that have brought down labor costs. But it also means many of the new jobs will pay less than the ones that had been lost.
“They are at the point where they can profitably produce a smaller vehicle,” says Dave Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor, Mich. “A lot of assets scrubbed from the books aren’t a liability anymore.”
The updated plants also will be able to make a wider variety of vehicles, so if sales fall in one category, the plants can raise production in others.
