$120 million from GM sparks hope in Detroit

With GM's $120 million investment, the plant that straddles the Detroit-Hamtramck border will build the Malibu and the Volt and reassure workers in this community.





NEW YORK (CNNMoney.com) -- General Motors' announcement Wednesday that it's investing $120 million in a Detroit auto plant is an encouraging sign for many in this hard hit city.

"Investment of that amount means long-term job security," said Tom Summers, vice president at union Local 22, which represents workers at the plant that straddles the Detroit-Hamtramck border. "And it shows that Michigan is still a centerpiece of manufacturing."

The investments are designed to produce the next generation of the Chevy Malibu, GM's best selling car, in the facility located just 5 miles northeast of downtown Detroit.

The Malibu is currently made at a Kansas City plant. It was also made at a factory about a half hour drive northeast of Detroit, but that plant is being retooled to make a smaller car.

Summers said 100 or so furloughed workers at the Hamtramck plant should be brought back, and maybe even new ones hired, over the next couple of years.

Ultimately, he said GM plans on running the factory three shifts a day, which could entail at least doubling the workforce. The plant currently employs just over 1,000 people and runs one shift a day.

GM could not immediately be reached for comment.

The plant, which has been operation since 1985, currently makes two sedans for the company, the Cadillac DTS and the Buick Lucerne.

It also makes GM's much-hyped plug-in electric car, the Chevy Volt, set to go on sale later this year.

Last year, GM said it is putting over $300 million worth of investments into the plant to make the Volt.

Summers said the Cadillac and Buick models will ultimately be phased out.

For the city, the investments represent a much-needed economic boost.

Unemployment in the Detroit metro area, which includes the suburbs, is over 15%, a third higher than the national average. In Detroit proper, it's a jaw-dropping 25%.

City leaders have been trying to bring new industry to Detroit for years, with mixed success.

Some in the city, notably in the business community, have said that even if U.S. automakers started hiring again in a big way, they wouldn't be likely to invest heavily in Detroit or in any of the northern manufacturing states, preferring to go to cheaper southern states instead.

Wednesday's announcement seemed to counter that logic, at least for the moment.

"This investment affirms that Detroit is and always will be the Motor City," Mayor Dave Bing said in a statement. "As we work to attract new jobs and investment, the auto industry will continue to play a vital role as employers and taxpayers."