General Motors on Monday endorsed the quality of the workforce and production efficiency at the Fairfax Assembly Plant, announcing a $174 million plant investment to support the new 2016 Chevrolet Malibu.
“This is job retention,” said Jim DeLuca, GM’s executive vice president for global manufacturing. “We could take this product anywhere. The fact that we’re doing it here is a testament to the people here in Kansas City.”
The Kansas City, Kan., plant will begin production of the new Malibu later this year.
The plant investment was revealed as part of a national celebration of GM’s production of 500 million vehicles worldwide over its 106-year history. About 12 million of them have been built at the Fairfax facility, which currently employs 3,230 hourly and 270 salaried workers.
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“Our membership here is more than ever engaged in our processes,” said Jorge Rodriguez, shop chairman for United Auto Workers Local 31 at the plant. “The union and the company are working together to deliver the best car to the world.”
No job additions were expected because of the new investments. The plant currently operates on three shifts, producing a vehicle every 58 seconds in a manufacturing floor space that covers 95 acres.
The good news for Fairfax follows other major investments in the Kansas City area’s auto industry. Ford Motor Co.’s Kansas City Assembly Plant at Claycomo, where about 7,000 workers build Ford’s F-150 pickup truck and the new Transit utility van, has received about $1.1 billion in recent Ford investments.
Economic development officials said last week that 11 new auto industry suppliers have created 1,800 jobs with a total payroll of $74 million in the Kansas City area in just the last few years, thanks to the location and health of the two assembly plants.
GM also used the occasion Monday to publicize its “global customer appreciation” efforts. Part of that involved giving a local Iraqi war veteran a symbolic key for the new 2016 Malibu.
GM president Mary Barra and GM North America president Alan Batey surprised Overland Park resident Trent Brining with a symbolic car key for the 2016 Malibu. Brining, who earned a Purple Heart after being seriously wounded in 2005 while on patrol in a Baghdad suburb, was identified as one of five GM customers in different regions who will get the new Malibu as gifts.
Barra said in remarks at the plant that the company is working hard to recognize loyal customers.
“Relationships matter,” Barra said, adding that GM’s 500-million vehicle production represents “500 million stories…We don’t build cars. We build memories.”
Barra said GM this year expects to sell 10 million vehicles, the largest annual volume in its 106-year history.
The company is hoping for stronger sales for its redesigned 2016 Malibu, which Batey said he was proud to unveil in early April at the New York Auto Show. He said he expects the car to “shatter perceptions” of what a mid-size sedan can be.
“You earned it. You deserve it,” Batey told hundreds of Fairfax workers assembled for the announcement.
The new Malibu is longer and has more legroom than the 2015 version. It uses higher-strength but lighter-weight steel, making it about 300 pounds lighter than the current midsize sedan. And it will come with some new, standard technology and safety packages, such as a special “teen driver” feature that parents can activate to monitor safe-driving habits.
The Monday celebration at the Fairfax plant heralded GM’s production in Kansas City, Kan., since 1945, when it began operating in a building that produced both automobiles and jet fighters. The current Fairfax facility, opened in 1987, also builds the Buick LaCrosse.
Plant manager Bill Kulhanek said the company had no announcements Monday in connection with the LaCrosse.
GM said the new investments add to nearly $2.7 billion in upgrades the company has made at the Fairfax plant since 2003. Upgrades include the first GM plant to get a new a road-conditions simulator, plus enhancements to the paint shop, door line improvements and other ergonomic or “lean” strategies designed to get components to the line more efficiently.
The company also touted its Kansas City community involvement, reflected in employment of United Auto Workers Local 31 members, the company’s annual total wage and benefit payroll of $432 million, its payment of state and local payroll taxes of $14.6 million and property taxes of $8.4 million. GM said it makes about $450,000 a year in local charitable contributions.
Kansas Gov. Sam Brownback, U.S. Sen. Jerry Moran, U.S. Rep. Kevin Yoder, and Kansas City, Kan., mayor Mark Holland spoke at the event, most of them recognizing the quality of labor at the plant.
The Fairfax news fits into an overall growth plan for the company announced last Thursday. GM said it would invest $5.4 billion in its U.S. factories over the next three years, part of continuing upgrades and expansions since the company’s bankruptcy and government bailout in 2009.
Last week’s announcement, which didn’t mention Fairfax, tallied planned investments of $520 million in a plant near Lansing, Mich., that makes sport utility vehicles, $139.5 million in a new body shop and stamping facilities in Warren, Mich., and $124 million in a Pontiac, Mich., plant that makes steel body panels.
As of last week, GM said it had invested $16.8 billion in U.S. operations since it exited the bankruptcy.
The company said $11.4 billion of that $16.8 billion has been invested since the 2011 national labor agreement between GM and the United Auto Workers. The investments accounted for 3,650 new jobs and stabilized the employment of about 20,700 other auto workers.
The UAW is scheduled to begin new contract negotiations this summer with GM, Ford and Fiat Chrysler.
The company this year also signaled its intent to spend $16 billion by 2020 in China and spend $5 billion on plants in Mexico. Globally, GM said, it has spent $5.75 billion in Mexico, $1.5 billion in Canada, and $12.7 billion outside of GM North America since 2009. It has about 190,000 manufacturing employees in 170 plants worldwide and works with 44 labor unions in addtion to the UAW.
GM reported in April that March sales were down 2 percent, but first-quarter profits had soared to $945 million from $125 million in the year-earlier quarter. The jump was largely attributed to purchases of pickups and SUVs, thanks to lower-priced gasoline.