When the US auto industry contracted following the 2008 financial crisis, the Detroit economy was shook to its core. Rising unemployment rates and vacancy rates in and around the Paris of the Midwest sent shockwaves through the local economy, leaving many pundits to declare Detroit dead. Five years later, the city is continuing to rebound, and the increased presence of big auto is helping the city rebound from the previously unthinkable doldrums it faced during the recession.
General Motors Co (NYSE: GM) is in on the action, announcing today that the firm will invest $200 million to expand its global powertrain engineering headquarters in Pontiac, Michigan, and to shift work there from four other locations by 2014. GM will build a 138,000 square-foot wing to the site, to be completed in the second half of 2014. The project includes construction of a new test wing at the global engineering headquarters in Pontiac, GM said in a statement today. The Detroit-based automaker is introducing about 20 new vehicles in the U.S. this year to freshen its product lineup, which has grown stale following the company’s 2009 bankruptcy reorganization. The investment is part of the U.S. automaker’s previously announced plan to spend $1.5 billion on its North American facilities this year, up from the $436 million last year. GM invests $8 billion annually in its operations globally.
While GM’s growth in Michigan is welcomed, it is not the only market they are expanding in. Earlier this week the firm announced other growth plans in the US, which will surely be a welcome sign to a still struggling economy. On Monday, GM said it would invest $600 million to expand its car assembly plant in Kansas City, Kansas.
Mark Reuss, president of GM North America, earlier this month provided the $1.5 billion figure for the company’s 2013 North American investment plans. GM has announced more than $10.2 billion since July 2009, Reuss said at the Automotive News World Congress in Detroit.
Following the firm’s bankruptcy, GM has begun an aggressive plan adapting their customer to the changing tastes of consumers, while also seeking to grow internationally – specifically in Asia. Through these efforts GM has taken a market leader role in the highly competitive Chinese market, and is beginning to see greater adoption rates of the hybrid, fuel efficient vehicles. Although GM has a long road ahead to return to its former glory, management at long last seems committed to making the right long run decisions of the firm, and is embracing the changing tastes they once sought to avoid.
