Canadian Manufacturing

GM boss Barra announces US$630M investment in Opel plants

Mary Barra said investment, new vehicle production "clear sign" of GM's commitment to struggling European subsidiary



FRANKFURT, Germany—General Motors Co. (GM) CEO Mary Barra says the automaker will invest more than US$630 million in its plants in Europe and build a new SUV at the home base for its Opel AG division there.

Barra said in a statement that the steps were a “clear sign” of GM’s commitment to its European subsidiary.

The announcement comes months after Barra, on her first foreign trip as GM chief executive, called Opel “a vital part” of the automaker’s operations, and vowed to add a new vehicle at Opel’s plant in Ruesselsheim.

The company will put new money into engine and transmission production at plants in Ruesselsheim and Kaiserslautern in Germany and at Tychy in Poland.

A third shift will be added at the company’s plant in Eisenach.

On a visit to Germany, Barra said the company plans by the end of the decade to build a new SUV model at Ruesselsheim that would serve as the Opel brand’s “second flagship” along with its Insignia model.

SUVs have been one growth segment in Europe’s depressed auto market.

GM’s European business lost US$387 million in the third quarter, half of which was restructuring costs.

Opel is rolling out 27 new models and 17 new engines over the coming years in an attempt to become profitable.

Detroit-based GM as a group made US$1.4 billion in net income in the third quarter.

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