GM's $63M Delta expansion nearly double expectations

DELTA TWP. – General Motors Co.'s planned $63 million expansion of its Lansing Delta Township plant is nearly twice what the company initially said it would spend.

The automaker announced the roughly 263,000-square foot project today. It calls for larger body and paint shops, along with an expanded general assembly area and new robotic equipment and tooling.

Construction was announced today. A spokeswoman for the Detroit carmaker said work should be done by the end of next year and the facilities should come online in 2016.

The expansion — larger than the company pitched to municipal leaders this year in tax incentive applications and site plans because the paint shop portion was not included — could mean the company plans to add or retool assembly lines, which often happens when preparing to launch or redesign a vehicle. Some analysts predict the plant could land a new crossover in the next few years.

GM won't say whether it will hire more people to build its popular crossovers — the Buick Enclave, Chevrolet Traverse and GMC Acadia. Nor has it let on to any future changes to its vehicle lineup at the Delta plant. The carmaker currently has 3,058 hourly workers on three shifts.

GM indicated in an application to the city of Lansing for tax incentives that 38 jobs could be retained.

Local GM leaders say the new robotic equipment and flexible tooling will keep the plant competitive and cost-effective, as GM fights to increase market share as carmakers around the globe build better, safer vehicles.

"Today's announcement is the latest example of our ongoing efforts to strengthen key plant capabilities," Cathy Clegg, GM's North America manufacturing vice president, said in a statement. "We're committed to producing the highest quality and safest vehicles in the market, which will help us earn customers for life. This is why facility investment is so important."

Adding on to the Delta plant — already GM's newest North American factory when it opened in 2006 and designed to be flexible, meaning it can change quickly to build multiple vehicle styles — will "make sure this location remains on the cutting edge," said Terry Miller, its assistant plant manager.

"You've always got to keep ahead of the curve," Miller said. "This plant is gearing itself up for a long-term future."

The expansion is part of nearly $300 million GM CEO Mary Barra said Tuesday the company plans to spend in Michigan to boost its carmaking operations. The dollar amount GM is proposing is nearly double the $37 million the company said it would invest in applications for tax incentives and on site plans.

Those early projections didn't include a 54,000-square-foot addition to the plant's paint shop that will allow workers to use better sealers to prevent corrosion.

GM today confirmed site plan estimates that would add 28,000 square feet to the north end of its general assembly building and more than 181,000 square feet to the north and south ends of the Delta plant's body shop. That will allow the company to bring in new robotic equipment and flexible tooling, it said.

GM could move Acadia production out of Delta Township in 2017 and replace it with a new Cadillac crossover that slots in between the SRX, which was built in Lansing until 2008 when it moved to Mexico, and the full-size Escalade SUV, said Mike Wall, an analyst with IHS Inc. in Grand Rapids.

That year also could bring full redesigns to the Enclave and Traverse, Wall said. Analysts believe both will stay at the Delta plant. The shift is believed to be part of GM's overall strategy to build as many of its crossovers as possible on a single vehicle platform.

Lansing City Council approved a a tax incentive that will cut real property taxes on the project in half for 12 years. An estimated $4 million in new tax revenue will be split between Lansing and Delta Township under a tax-sharing agreement.

Bill Reed, president of United Auto Workers Local 602 that represents Delta's hourly employees, said GM's investment in both of its Lansing facilities is a "testament" to local workers' ability to build popular cars.

"To be able to expand this plant and know that we've got a future here — and we're going to continue to even put more technology into these vehicles, build them better than we've ever been able to build them, just get them out the door — that's great," Reed said.

Besides Delta, GM is investing $44.5 million to build a 400,000-square-foot logistics center at its Lansing Grand River assembly plant, which makes the Cadillac ATS and CTS. That facility should open by early 2015. It also is building a $174 million, 225,000-square-foot stamping plant at Lansing Grand River, to open in 2016.

Both are believed tied to the upcoming production move of the Chevrolet Camaro to the Grand River plant, possibly in 2015.

At a glance

Since 2010, General Motors Co. has spent nearly $600 million at its two Lansing-area factories — Lansing Grand River, which builds the Cadillac CTS line of coupes, sedans and wagons and the Cadillac ATS sedan and coupe; and Lansing Delta Township, which makes the Buick Enclave, Chevrolet Traverse and GMC Acadia crossovers. Here are some key investments:

2010: GM spends $190 million to add 600 jobs and a second shift at Grand River in preparation for the launch of the small ATS luxury sedan that debuted in 2012. It also invests $37 million at Delta for new tooling and equipment.

2011: An $88 million investment is planned to retool the CTS. The upgraded sedan came off the line at Grand River in 2013.

2012: GM announces plans to bring production of the Chevrolet Camaro to Lansing Grand River from Canada, possibly in 2015. An official launch date has not been released.

2013: GM says it will build a $44.5 million logistics center to sort and deliver parts to its assembly lines. As many as 200 new jobs are expected when the facility opens in 2015.

2014: GM says a $174 million stamping plant will be built at Lansing Grand River. The 225,000-square-foot facility is expected to create 145 jobs when it opens in 2016. GM also plans a $63 million expansion at Delta, which could be open by 2016.