May
16
2011
It has been a long slow slog back from the brink of disaster, but General Motors seems to finally be back on track. In fact, they have already paid back all the money they borrowed from the United States government in 2008 in order to avoid bankruptcy. Sales of their big trucks and SUVs have rebounded, even as gasoline prices continue to climb and their new small car market share, led by the new Chevrolet Volt, a gas-electric hybrid vehicle only just released this year, they are poised to reclaim the title of the world largest automobile maker back from Toyota.
As a further sign of their financial stability, this week General Motors announced they will be investing $2 billion in 17 automobile manufacturing plants across the United States. This one move is likely to create more than 4,000 jobs at a time when the nation finds itself mired in high unemployment and tough economic times. If nothing else the move will likely further endear the company to Americans eager for a home grown company they can throw their support behind.
In Toledo, Ohio, General Motors will invest $204 million in a plant that will build a new 8-speed transmission. This will add or save about 250 high paying jobs that would otherwise have been lost to reductions. It recently announced a $131 million investment is a Chevrolet Corvette factory in Bowling Green, Kentucky. This move is not only likely to boost interest in the revamped Corvette line but also save jobs where they are desperately needed.
The company is still negotiating tax and incentive plans with city leaders around the country so they are not reporting any other details about their plans for investment in other plants, but it seems likely these announcements will come shortly. The company has announced it will spend $2 billion and save thousands of jobs, it is too late for them to back down now.
The investments are all likely to be made at manufacturing plants around the Midwest United States. By saving jobs at these plants the company will send a ripple through the extensive supply ad support network built around these plants. Well paid employees will spend more money at area stores, they will make more parts which will need to be installed and shipped and stored, creating more jobs. General Motors is estimating the 4,000 jobs they save will translate into closer to 30,000 jobs saved around the country. This might seem optimistic, but it is reasonable to assume there will be a positive ripple effect.
Since emerging from bankruptcy in 2009 General Motors has already saved or created more than 9,000 jobs and invested more than $3 billion doing it. Last month the company calculated a $3.2 billion quarterly profit, the fifth consecutive quarterly profit for the company and the biggest it has had in more than a decade.
General Motors has made many changes to their product line in the last few years. Where they once sold eight different vehicle models they now sell just four: Chevrolet, Buick, GMC and Cadillac. They have also streamlined production, reduced costs and created an environment that is more conducive to profit generation than ever before. In fact, if this keeps up, General Motors might actually be the greatest car maker ever. Again!
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