While General Motors is considering the development of US$121m logistics centre at Detroit-Hamtramck Assembly Plant, it is seeking $1.8m tax abatement over 15 years from the city of Detroit, reports The Detroit News.
The tax abatement request was put up by the automaker for the approval by the City Council on 23 September. Once the council approves it, Detroit Emergency Manager Kevyn Orr will also have to approve it.
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The plant at Hamtramck currently has around 1,600 workers who build extended-range electric Chevrolet Volt, Opel Ampera, Chevrolet Malibu and Chevrolet Impala.
GM said, “GM is committed to Detroit. We are developing a business case for a potential future investment at Detroit-Hamtramck Assembly that would fund facility improvements aimed at strengthening the plant’s manufacturing capability.” It further added, “the proposed project is necessary to keep the plant competitive long-term.”
The company is planning two logistics facilities occupying the area of 366,000 square feet and would create 210 logistics related jobs. In addition, the memo also stated that the project will create 165 jobs related to construction, which would start in November and is expected to wind up in April 2015. The automaker has said that it will not comment on the number of jobs expected to be created by the new logistics centre. The company has; however, invested around $526m in Detroit-Hamtramck plant in past four years.
Meanwhile, the automaker is investing $44.5m in building logistics centre at Lansing Grand River Assembly Plant. Lansing has given the company $4m tax abatement for 400,000 square-foot centre, which will create employment opportunities to 200 jobs. This facility will support sequencing and assembling parts, thus helping the manufacturing flexibility. It will not only save GM’s money but will also enhance quality and reduce transportation costs.
General Motors is trying to reduce $1bn from logistics and material expenses by 2016 in North America. The automaker also intends to reduce the cost by relocating suppliers closer to assembly plants and add stamping plants to assembly facilities and extension of rail lines to plants. GM is investing $3m to extend a rail line near Detroit-Hamtramck to join the main track close to the plant. The line would save $7m in car-hauling transportation expenses over three years.
