General Motors Co. is considering an expansion of its Arlington, Texas, assembly plant to boost production of the large sport-utility vehicles, according to documents filed with the city government of the Dallas suburb.
GM officials have said for months the Arlington plant is running full out to keep up with demand for full-size Chevrolet Suburbans and Tahoes, GMC Yukons and Cadillac Escalades. The full-size SUVs are also in great demand in the Middle East and Africa and nearly one third of the plant’s output has been ticketed for export.
The tentative plans, which haven’t been confirmed by GM, call for adding 1.2 million square feet of space to the plant, adding 589 jobs. The plant currently employs 4,125, more than the required level, the city said. GM has filed a petition with the city government in Arlington asking for tax abatement of 80% for 10 years on the expanded plant and its equipment and waiving building permit and development fees.
With the Texas economy reeling from the drop in oil prices, the approval is expected to be swift.
The drop in oil prices also has helped boost sales in full-size SUV segment, which is dominated by GM. Ford, Toyota and Nissan also build full-size SUVs but GM market share stands at close to 80%
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GM could spend $307 million on the physical expansion and $986 million on new equipment, according to the city of Arlington’s website, and construction could begin sometime later this year.
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Before filing for bankruptcy in 2009, GM had also built its big SUVs at a second plant in Janesville, Wisconsin. However, the Janesville plant built its last SUVs before Christmas in 2008 and closed during the bankruptcy proceedings.
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The Janesville plant is currently listed under “standby” under the terms of GM’s current contract with the United Auto Workers. With the expansion of the Arlington plant underway, GM is expected to ask the union for the right to shutter the Janesville plant, which was built nearly 100 years ago, for good.