General Motors Co. said Monday it will add 300 jobs and invest $245 million into its Orion Assembly Plant to launch a new vehicle, a positive sign for the plant that faces another round of layoffs starting next month amid slow car sales.
The Detroit automaker said the new vehicle, which it did not name, is "unlike any in the plant's 32-year history." The investment is part of the $5.4 billion GM said in late April it plans to spend to upgrade U.S. plants over three years and the 650 new jobs those investments are expected to create.
UAW Local 5960 President Louis Rocha said the investment and new vehicle for the plant comes at a good time for employees who have been dealing with feelings of uncertainty about Orion's long-term future.
"People were just wondering the future of this place, especially the small car," he said. "So something like this, to be able to go out for three weeks in July is great news. They can go with a little bit of ease and comfort and enjoy that time off."
GM did not immediately say when the jobs or the vehicle would be added to the plant, but Cathy Clegg, GM North America vice president of manufacturing and labor relations, said the vehicle is all-new for the plant and is a new vehicle for GM. She declined to provide other details. The vehicle likely is three to four years away from production and will follow the launch of the Chevrolet Bolt EV.
About 1,760 workers, including 1,580 hourly and 180 salaried, now build the Chevrolet Sonic subcompact and Buick Verano small car there. GM would not say what the longer term status of the Verano and Sonic are.
The unnamed vehicle is the second the plant has landed in recent months. GM will spend $160 million to upgrade Orion Assembly to support the Bolt EV, a 200-mile plus electric range vehicle that will cost about $30,000 after federal tax rebates. GM has not said when that vehicle will go into production, but analysts expect it to roll out in early 2017.
"Why are we committing so many dollars to this facility? It's simply put this way: it's one of the best plants we have," Clegg told cheering workers, many dressed in red to show solidarity ahead of contract talks starting next month. "This plant is a shining example of GM manufacturing and how to get the job done and how to get it done working together, how to get it done efficiently, building outstanding quality vehicles for our customers.
"And incorporating innovation and creativity into our manufacturing process, there's no plant that does that better than this plant right here."
The investment announcement comes just a few weeks ahead of GM and UAW leaders who will shake hands July 13 to kick off 2015 contract talks. The union contract expires in mid September.
The Orion plant was idled as part of GM's 2009 bankruptcy and initially scheduled to close following GM's restructuring, but reopened in 2010 after the union agreed to significant labor concessions that include requiring 40 percent of tier-two hourly workers to earn entry-level wages. Since the plant idling, GM has announced plant investments of $962 million.
UAW Vice President Cindy Estrada said the union and GM working together are enabling investments like at Orion.
"It doesn't mean that there's not more that we need to do to bridge the gap...," Estrada said. "But bridging the gap only happens when you have the collaboration and creativity and innovation that all of you have shown here."
The UAW has said it wants to bridge the pay gap between first and second tier workers during upcoming contract negotiations. Less than 20 percent of GM's overall hourly workforce is paid entry-level wages.
Earlier this month, GM said it would lay off 100 workers at Orion Assembly beginning in July through the end of the year as it trims production to deal with slower car sales. The layoffs are in addition to 160 people GM in November said it would lay off through the end of 2015.
UAW Local 5960 Shop Chairman Joel Persinger said those laid off so far at the plant have shifted to work at GM's Detroit Hamtramck Assembly Plant.
GM has also idled production at Orion for a week each in February, March and April. The plant also will be down for three weeks around the July 4th holiday.
With lower gas prices and changing consumer preferences toward SUVs and crossovers, car sales have fallen. Verano sales of 15,279 are down 15.6 percent through May, while Sonic sales of 29,082 are down 28.5 percent.
Clegg said GM remains committed to making small cars in the United States and profitably.
"We're committed to America, Americans and American jobs. And we're committed to Orion and the state of Michigan in a big way," she said. "Orion is the only plant in the U.S. to produce a subcompact vehicle, the Chevrolet Sonic, and we're excited for the opportunity to grow the portfolio for this plant."
GM also said it will identify the remaining $2.3 billion in U.S. plant investments by the end of 2015. GM has said 300 of the new jobs are slated for its components plant in Wyoming, near Grand Rapids.