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General Motors Will Spend $1.4B On SUV Plant Upgrades

GM will add a new paint shop, body shop and general assembly area upgrades.

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General Motors plans to spend $1.4 billion to expand and improve its SUV factory in Arlington, Texas to meet strong demand for its vehicles.

The company said the plans, announced Tuesday, represent its largest plant investment in the U.S. this year.

General Motors will add a new paint shop, body shop and general assembly area upgrades to the 60-year-old assembly plant.

Demand for GM's full-size SUVs has been so strong that the plant can't make them fast enough. The factory has about 3,800 hourly workers on three shifts making the Chevrolet Tahoe and Suburban, GMC Yukon and the Cadillac Escalade. The plant has basically been running flat-out for the past two years, and additional hiring is expected.

General Motors says the upgrades will take about three years to complete but its existing production schedule will be unaffected.

Sales of the big GM SUVs are up more than 10 percent through June, according to Autodata Corp. GM has sold more than 111,000 of the truck-based vehicles this year as low gas prices have helped shift U.S. buyers away from cars and into SUVs of all sizes. But the boom in SUV sales began even before gas prices fell.

The full-size SUVs also are among GM's most profitable. Analysts say GM makes more than $10,000 per vehicle. When loaded with options, a Cadillac Escalade, the most expensive of the SUVs, can run more than $90,000.

Arlington Mayor Jeff Williams applauded the plans, saying that the city has benefited from GM's support and this investment solidifies its commitment to the community.

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