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GM announced on Wednesday it would be adding an unspecified line at the GM Powertrain Plant in Toledo.
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Toledo Transmission to get $668M for new product line

THE BLADE

Toledo Transmission to get $668M for new product line

Investment comes despite 2,000 job cuts elsewhere

General Motors Co. plans to invest more than half a billion dollars in Toledo, but the automaker’s announcement was tempered by news that GM is also cutting more than 2,000 jobs elsewhere in Ohio and Michigan as U.S. buyers continue to shy away from cars in favor of trucks and sport utility vehicles.

As part of a broader outline of the company’s U.S. manufacturing plans, GM on Wednesday pledged to spend $668 million at its Toledo Transmission Plant in order to prepare the factory for an unspecified new product line.

Company officials would not provide any details on what that product might be, but it is believed to be a new transmission. No new jobs are expected as a result of the investment, a spokesman said, and a start date for the work wasn’t provided.

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Even so, leaders with the United Auto Workers cheered GM’s move as yet another layer of job security for the Toledo plant’s 2,000 employees.

“Their hard work, loyalty, and dedication is paying off,” UAW Local 14 president Ray Wood said. “Job security is a real big deal for us and that new investment kind of perpetuates that. Our membership has kept their mind focused on the things they can control and what they can control is making a good quality product.”

The Toledo Transmission plant builds six and eight-speed transmissions that go in a variety of GM cars and trucks.

Including Wednesday’s announcement, the company has committed to investing more than $1 billion in the plant since 2011. GM promised new product investment at the Toledo plant, without stating a dollar amount, when it reached a national contract last year with the UAW.

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GM’s announcement is believed to be tied to a plan submitted last month to the Toledo-Lucas County Plan Commission asking for approval to add more than 650,000 square feet to the facility’s existing 2.2 million square feet, though the company wouldn’t confirm that.

“What’s been talked about with the city, those are associated with the future product programs but at this point all we can state is what we’ve released today,” spokesman Kevin Nadrowski said.

GM also announced Wednesday a $37 million investment at Bedford Casting Operations in Indiana, and $211 million at Lansing Grand River Assembly. The company didn’t provide specifics on the investments.

In the case of Lansing, the investment was overshadowed by news that GM would cut the plant’s third shift early next year, leading to 800 layoffs. Lansing builds the Cadillac ATS, Cadillac CTS, and Chevrolet Camaro. GM is also killing the third shift at its Lordstown plant outside Youngstown that builds the Chevrolet Cruze.

Though the layoffs will be a shock to the local economies, analysts say the writing was on the wall.

“GM’s announcement that it is trimming production and laying off 2,000 workers comes as no surprise,” said Michelle Krebs, an analyst with AutoTrader. “Those production cuts are taking place at GM plants in Ohio and Michigan that produce cars, of which GM has too many in inventory.”

Sales of the Cruze, for example, were down 20 percent through October. Sales of the ATS and CTS were each down 17 percent.

That GM plans to continue building any small cars in the United States is making them a bit of an outlier. Ford Motor Co. has announced it will shift production of the Focus and C-Max from Michigan to Mexico, while Fiat Chrysler Automobiles has already killed off the Dodge Dart and will discontinue the Chrysler 200 later this year. Some foreign automakers, including Honda and Toyota, still make small cars in the United States, though Toyota has announced plans to move some Corolla production from Canada to a new plant in Mexico.

With its lower wages, Mexico provides automakers a better chance to turn a profit on smaller vehicles.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.

First Published November 10, 2016, 5:00 a.m.

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